2018 IRA Limits on Contributions and Income

For 2018, contribution limits remain unchanged, but income limits adjust

IRA account egg sitting in a nest.
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How much can you contribute to an IRA in 2018? 

  • $5,500 for those age 49 and under
  • $6,500 for those age 50 and older (use age at end of the calendar year)

These contribution amounts are the same as they have been for the past few years; however, the income limits that apply to determine if you can deduct all or some of the contribution amount have increased slightly.

Note: the contribution limits and income limitations discussed in this article do not apply to SEP IRAs or SIMPLE IRAs—only to the Traditional IRA.

Income Limits When You Have a Company-Sponsored Retirement Plan

If you and/or your spouse participate in a company-sponsored retirement plan (such as 401(k) or Section 457), you can still make an IRA contribution, but it may not be deductible. Income limitations apply to determine if you can deduct your IRA contribution.

  • For single filers who are covered by a company retirement plan in 2018, the deduction is phased out between $63,000 and $73,000 of modified adjusted gross income (MAGI). (The 2017 limit was $62,000–$72,000.) 
  • For married filers, if you are covered by a company retirement plan in 2018 the deduction is phased out between $101,000 and $121,000 of MAGI.
  • For married filers where you are not covered by a company plan but your spouse is the deduction for your IRA contribution is phased out between $189,000 and $199,000 of MAGI.

    What does it mean to participate in a company-sponsored plan? The IRS provides a concise description in Are You Covered by an Employer's Retirement Plan?

    Nondeductible IRA Contributions

    Even if your IRA contribution is not deductible, you can still make a contribution. It is called a nondeductible IRA contribution and the funds in the account will grow tax-deferred until such time as you take a withdrawal.

    Or, you may be eligible to make a full or partial Roth IRA contribution. Your total contributions to Roth and Traditional IRAs cannot exceed the dollar limits above, meaning you can contribute to both, such as $2,000 to a Traditional IRA and $3,500 to a Roth, but the total of both contributions can't exceed the maximum contribution amount.

    IRA rollovers and transfers do not count as a "contribution" and so they will not affect your ability to fund an IRA.

    Earned Income Rules for All IRA Contributions

    You must have earned income to make an IRA contribution of any type. The amount of earned income you have must equal or exceed the amount of your IRA contribution. This means if you are retired and no longer working, you may not make an IRA contribution, although you can still rollover or transfer money from a 401(k) to an IRA.

    Spousal IRA Contributions

    You may make an IRA contribution for a non-working spouse who has no earned income, as long as you have enough earned income. This is called a spousal IRA contribution.

    2018 IRA Contribution Deadlines

    • You have until April 15th of 2019 to make your 2018 IRA contribution.

    Not sure which is best for you? There is no tax deduction for Roth IRA contributions but they have other features that make them one of the most useful retirement account options available.

    Traditional IRA or HSA?

    HSA stands for Health Savings Account. With a Health Savings Account, you can make a deductible contribution and the money grows tax-free if used for health care expenses. I think many people would benefit from funding an HSA instead of an IRA, as the HSA offers penalty-free access for qualified medical expenses. This allows the HSA to be used to accumulate funds for retirement while doing double duty as an emergency fund for medical expenses in the event you have no other available funds to use to pay for them.

    IRA Limits Are Indexed to Inflation

    IRA limits are tied to inflation but only go up in $500 increments. If the annual inflation adjustment would only be $150, it would take 4 years before the IRS raised the limit. You can see how it works in the examples below.

    Year Limit If Age 50+
    2017 $5,500 $6,500
    2016 $5,500 $6,500
    2015 $5,500 $6,500
    2014 $5,500 $6,500
    2013 $5,500 $6,500
    2012 $5,500 $6,500
    2011 $5,000 $6,000
    2010 $5,000 $6,000
    2009 $5,000 $6,000

    Income limits on the ability to deduct your IRA contribution if you or your spouse have access to a company retirement plan also rise with inflation. Below is a brief history of these limits - the range refers to your modified adjusted gross income. 

    Year Single Married 1 spouse w/ company plan
    2017 $62,000 - $72,000 $99,000 - $119,000 $186,000 - $196,000
    2016 $61,000 - $71,000 $98,000 - $118,000 $183,000 - $193,000
    2015 $61,000 - $71,000 $98,000 - $118,000 $183,000 - $193,000
    2014 $60,000 - $70,000 $96,000 - $116,000 $181,000 - $191,000
    2013 $59,000 - $69,000 $95,000 - $115,000 $178,000 - $188,000
    2012 $58,000 - $68,000 $92,000 - $112,000 $173,000 - $183,000
    2011 $56,000 - $66,000 $90,000 - $110,000 $169,000 - $179,000