The absolute maximum Roth IRA contribution is $5,500 per year
. Remember that these numbers change each year, so be sure to double check that you have the right numbers before relying on them. These numbers are for the year 2018
.
Eligibility
If you are single, and your modified adjusted gross income (MAGI) is below $120,000
, you can contribute any amount up to the maximum. If single with income above $135,000
, you cannot contribute to a Roth IRA at all. If your income is between those two number, you can contribute a partial amount (less than the maximum, calculated based on your income).
If married, a combined income below $189,000
allows the full contribution, and a combined income above $199,000
allows none. Between those two numbers allows a partial contribution.
Benefits
Roth IRAs contain post-tax dollars (meaning you make deposits using money that you have already paid taxes on).
Roth IRAs grow tax-free.
Roth IRA contributions can be withdrawn at any time, penalty-free and tax-free. There is no age requirement. However, Roth IRA earnings and rollovers cannot be withdrawn until age 59.5 or they are subject to a 10% penalty (but still no taxes).
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