By Sunwook Jin, CFP®, CRPC®, CMFC®

Although there are no income limits for a Traditional IRA, depends on how much you earn can have bearings on how much you can contribute to a Roth IRA.

The maximum you can contribute into a Roth IRA is limited to $5,500 per year per person ($6,500 if you’re age 50 or older).

Your contribution can be either reduced or phased-out if your Modified Adjusted Gross Income (MAGI) approaches the upper limits as shown below (2018 income range):

Single – $120,000 – $135,000

Married, filing jointly – $189,000 – $199,000

Married, filing separately – $0 – $10,000

If your income doesn’t qualify, you may still want to open a Roth IRA.  Because a “backdoor” option could be your solution.

The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax-free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.


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