IRA Contribution Limits

Individual retirement accounts (IRAs) are among the most common ways to save for retirement. But if you own an IRA and you're not fully funding it each year, you could be missing an opportunity for your investments to grow tax-deferred. Two of the most frequently asked questions about IRAs are, "What are the IRA contribution limits?" and, "When is the IRA contribution deadline?" Below are the current Roth IRA and traditional contribution limits and deadlines as well as details on how you can take advantage of these retirement savings options.

2022 contribution limits

• Age 49 and under: $6,000
• Age 50 and over: $7,000

2023 contribution limits

• Age 49 and under: $6,500
• Age 50 and over: $7,500

To make an IRA contribution, you have to be eligible, which means you must either:

• Have taxable compensation, or

• Have a spouse with taxable compensation and file a joint tax return.

If you have more than one IRA (for example, a traditional IRA and a Roth IRA, your total combined contribution to all your accounts can't exceed the above limits.

In addition, if your income exceeds certain levels, the maximum Roth IRA contribution may be lower than the above amounts, or you may not be able to contribute to a Roth IRA at all. It's all based on your modified adjusted gross income, or MAGI. If your MAGI falls in the "partial" range, your tax advisor can help determine your exact IRA contribution maximum.

Remember, the earlier you contribute to your IRA, the more time your money has to benefit from potential growth. Visit our retirement calculator to see the impact time has on potential growth.

For more details about IRA requirements, visit the IRS website. 

MAGI Roth IRA contribution limits - Individual filer
2022 MAGI	Amount
Less than $129,000	Full
$129,000 - $143,999	Partial
$144,000 or more	None
2023 MAGI
Less than $138,000	Full
$138,000 - $152,999	Partial
$153,000 or more	None

MAGI Roth IRA contribution limits - Married filing jointly
2022 MAGI	Amount
Less than $204,000	Full
$204,000 - $213,999	Partial
$214,000 or more	None
2023 MAGI
Less than $218,000	Full
$218,000 - $227,999	Partial
$228,000	None

MAGI Roth IRA contribution limits - Married filing separately
2022 and 2023 MAGI	Amount
$1 - $9,999	Partial
$10,000 or more	None
$144,000 or more	None
2023 MAGI
Less than $138,000	Full
$138,000 - $152,999	Partial
$153,000 or more	None

Important information

Traditional: Early distributions may be subject to tax and a 10% penalty if you take a distribution before reaching age 59 1/2.

Roth: Earnings distributions may be subject to tax and a 10% penalty if the account is less than five years old and the owner is younger than 59 1/2.

Don't wait!

A Roth or traditional IRA can be an essential part of your retirement savings strategy. It offers a tax-advantaged way to help build your retirement nest egg. Even if you have a retirement plan at work, you can contribute to an IRA.

Don't pass up this opportunity to help prepare for your financial future. Contact a Personal Banker at First State Bank today!