The Roth IRA contribution limits 2011 dictate the maximum amount you can put aside for retirement using individual retirement accounts. The traditional IRA and Roth IRA contribution limits 2011, plus the 2011 traditional IRA deductibility limitations and the 2011 Roth IRA income limits, are all important factors.
Roth IRA Contribution Limits 2011
The Roth IRA contribution limits 2011 have not changed from the 2010 rules. Beginning in 2008, the maximum amount you may contribute to a standard IRA per year is $5,000. But, if you will be 50 years of age or older by the end of 2011, you can contribute an additional $1,000, for a $6,000 total IRA contribution limit. Remember that you and/or your spouse must have earned income at least as great as the amount you contribute.
These restrictions apply to both standard and Roth IRAs. Even though you may be eligible to contribute to both plans, your combined contribution to both accounts may not exceed your limit above ($5,000 or $6,000).
Deductible Roth IRA Contribution Limits 2011
Even though there is no maximum income restriction for contributing to a standard IRA, there are income capst to deducting standard IRA contributions, which will vary based on marital status, income, and workplace retirement (i.e., 401(k), 403(b) plan eligibility).
2011 Roth IRA Income Limits
Unlike standard IRA contributions, not every employee can contribute to a Roth IRA. Based on one’s marital status and income, some upper earners are not eligible to contribute to Roth IRAs. However, because these plans are so beneficial to your plans for retirement, be sure to understand the limits every year before deciding that you don’t qualify.
2011 Roth Conversion Income Limitations
Even if you earn too much income for a direct Roth IRA contribution, you may be able to use a Roth IRA through the “back door”. The opportunity to convert a regular IRA to a Roth IRA became accessible to all taxpayers regardless of income on January 1, 2010. Historically, a conversion was only accessible to those who had a modified adjusted gross income of $100,000 or less.
An alternate option for sophisticated investors is the self directed IRA, which allows investorsretirement investors to acquire non-traditional assets such as real estate, notes (both secured and unsecured), physical gold and silver, and other investments that would typically be unavailable to traditional IRA investors. Self directed IRA’s are offered in both traditional and Roth formats.
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