Aug 2

Question by rainfingers: Why is there an upper income limit for contributing to a Roth IRA?
People over a certain income are not allowed to make any contributions to a Roth IRA. Why? Wouldn’t people with high income rather pay the taxes later anyway (as they would do with a traditional IRA)? In other words, doesn’t this rule just prohibit people from doing something they’d already rather not do?
Mrs. F: in addition to the upper income limit, there’s also a yearly contribution limit ($ 4000 this year). But Roth IRAs are still very, very, worth it! You can always put more money in next year, and the year after that, etc. Contribute the maximum, or as much as you can, every year; you’ll be glad later.

Best answer:

Answer by Mrs F
That doesn’t sound right. We were thinking of getting one of those sometime in the winter, but we should be able to contribute all we want!

Know better? Leave your own answer in the comments!

2 comments so far...

  • Wayne Z Said on August 2nd, 2011 at 8:52 pm:

    Ask your congressman.

  • mathew Said on August 2nd, 2011 at 9:01 pm:

    The limits are for AGI over $ 160,000 if married (MFJ) and $ 100,000 for single folks. I would assume that the idea of having a limit is to give tax breaks to lower income folks and continue to tax the “rich”. All of this a political decision by Congress not the IRS.

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