Weird. Earlier this fall, I wrote up an article about 2008 IRA contribution limits, but I apparently never got around to creating a standalone post for 2007 IRA contribution limits. Given that you have until Tax Day to make IRA contributions for the previous year, this is still timely information, so here goes…
For tax year 2007, the IRA contribution limit is $4, 000 for individuals under age 50. If you’re 50 or older, you’re eligible for “catchup contributions, ” and thus the limits increases to $5, 000. Note that these limits apply to both traditional and Roth IRAs, as well as to things like individual contributions to SEP-IRAs. Note that Roth contributions are subject to income limits.
For a look at next year’s IRA contribution limits (they’re higher!), check out my article on 2008 IRA contribution limits. And if you’re not sure whether or not you can afford to contribute to an IRA, be sure to check out my alternative strategy for funding your IRA.
5 Responses to “2007 IRA Contribution Limits”
Can you contribute to a 401k from my current employer and a traditional IRA rolled over from a previous employers 401k in the same tax year?
IRA limits are independent of 401k-type limits.
If you have multiple plans (say 401k and Roth 401k) at one employer, I’m quite sure that you have one $15.5k limit total, but if you have multiple employers then you have multiple limits.
There are some rules about what constitutes a separate employer, but generally if they have different ownership then you’re okay. Self-employment + a day job counts as two separate employers.
Anyone able to work out some under-50 permutations? E.g., firm offers both 401k and Roth 401k; also have an IRA and a Roth IRA from previous lives. What are the mix-n-match limits? Can I max my firm’s offerings AND my IRA?
(Point to consider: $15k in a Roth 401k is effectively a greater contribution than $15k in a standard 401k.)
We use a very similar strategy. This is the first time we will be contributing to a roth. We have been saving enough over the year to open up in Vanguard.
I’m throwing money into a separate ING savings account so that on January 1 I can setup the transfer to my Vanguard Roth IRA, so I get the full yaer’s benefit of tax-free growth…mmm….retirement planning.