2015 IRA Contribution Limits

2015 IRA Contribution Limits

Roth IRA contribution limits 2015
How much can you put away in a Roth IRA this year?. Jonathan Gelber (c) Getty Images

In a perfect world, there would be no limit to what you could put into a Roth individual retirement account. It's one of those financial products with no real downsides, and contributing to one is about as close as sheltering your money from taxes as most of us will get. And it's completely legal!

But there are limits on how much you can put into a Roth IRA each year. There are also income limits for contributors.

The contribution maximums change every year or so, adjusting with the cost of living. Some years, they stay the same. Learn about the 2015 Roth IRA contribution and income limits. 

For previous years, see:

Roth IRA contribution limits for 2014
Roth IRA contribution limits for 2013
Roth IRA contribution limits for 2012 

2015 Roth IRA Contribution Limits 

The contribution limits for 2015 remain unchanged from 2014. You can still put away up to $5,500 each year in a Roth IRA. If you are age 50 or older, you can add $1,000 to that as a catch-up contribution, bringing the total 2015 Roth IRA maximum to $6,500 for senior savers.

Roth IRA Basics

Roth IRA contribution limits are the same as traditional IRAs, but the two work very differently. With a traditional IRA, contributions can be tax deductible, the investments within grow tax-deferred, but when you take the money out at retirement you will pay taxes on the income.

 Roth IRA contributions are made after tax, meaning contributions are not deductible. The investments grow tax free, and when you take the money out at retirement, those distributions are also tax free. So if you think taxes will be higher in the future than they are today, a Roth IRA is a great investment opportunity.

In the meantime, contributions made to a Roth IRA can generally be taken out before retirement without taxes or penalties. (Learn more about rules for Roth IRA withdrawals.)

Roth IRA Income Eligibility Limits 2015

Whether you can contribute to a Roth IRA depends upon your personal income. If you file single or head of household on your tax return, you are eligible to contribute the maximum amount to a Roth IRA in 2015  if you earn less than can contribute the maximum to a Roth IRA if your income is $116,000 or less. The amount single filers can contribute phases out for incomes of between $116,000 and $131,000 (up from between $114,000 and $129,000 in 2014). If you are married filing jointly, the amount that you can contribute to a Roth IRA phases out for incomes between $183,000 and $193,000 in 2015 (up from $181,000 to $191,000 in 2014). Make more than that and you are not likely eligible to contribute to a Roth this year. 

2015 Contribution Maximums for Other Types of IRAs and 401ks

Small business owners or self-employed folks can add to their IRA contributions in 2015. You can contribute up to $53,000 to a SEP IRA in 2015, or 25% of annual gross income up to $265,000. If you have a SIMPLE IRA, your maximums will rise from $12,000 in 2014 to $12,500 in 2015.

SIMPLE IRA owners age 50 or older can also add a catch-up contribution of $3,000 in 2015, compared to $2,500 in the prior year. 

Employees with a 401(k) or individual or solo 401(k) can also look forward to increased contributions. The maximum limit you can put into a 401(k) in 2015 is $18,000. Add $6,000 to this total if you are over 50 and you are looking at a max of $24,000, not including an employer match. 

Whatever the savings vehicle, now is the time to start saving for retirement. Maxing our your Roth IRA contribution in 2015 could be a great place to start. 

 

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