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Q&A: Why is there an upper income limit for contributing to a Roth IRA?

admin — Wed, 03 Aug 2011 00:19:18 +0000

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!

Is there a max amount you can contribute to 2 seperate 401k accounts if you are married filing joinly?

admin — Fri, 09 Jul 2010 00:10:52 +0000

My wife’s company just added a 401k and I am considering contributing to it but was wondering if there are limits to max 401k contributions if we file married/jointly? I currently max out my 401k account and I know with our combined income status IRA contributions are no longer tax deductible so I am worried adding to her 401k will bring the same limitation.

Should I open a Roth IRA at 22, or is there a better way to save my money for retirement?

admin — Tue, 20 Apr 2010 03:47:44 +0000

I’ve just graduated college and started my first full-time job a couple months ago. Lately I’ve been reading articles about Roth IRA’s and how young people should consider them because they can save a huge amount of money by the time they retire with the smallest amount of input (since they’re getting started earlier). I know I’m still young, but I want to set myself up for a comfortable future. I’m making $35k/year salary, but my company does not have a 401K plan (as of yet).

I would like to try putting away $250 a month in order to create a nest egg for when I retire (and maybe allow myself to retire a little earlier?). Is a Roth IRA the way to go, or is there something better I could do with my money to allow it to increase over the years? I don’t know much about this stuff and don’t even know where to start. I do know that IRAs have something to do with investments, which is risky and scares me a little…

Are there any limitations to my contributions annually if I have a 401k, IRAs, Roth IRAs?

admin — Sat, 06 Feb 2010 18:12:14 +0000

I have a fulltime job, and also am an independent contractor. I usually contribute 4k annual to my traditional IRA to get the tax write-off. I heard there are some limitations if you make more than a 100k annual.

Is there a maximum amount you can withdraw from IRAs at age 71 without penalties?

admin — Sat, 23 Jan 2010 00:36:37 +0000

My husband wants to cash in two IRAs that are earning very low interest. He will use the money for buying a house to fix up for rental. Would it be best to do this or to take out the minimum amount and cash in regular CDs which have not matured?

Also, does the date the IRAs were purchased matter? Other smaller IRAs were combined with these about a year ago – could that be a problem?

Thanks for your help!

Are there any Roth IRAs that allow me to have total freedom?

admin — Tue, 19 Jan 2010 23:44:26 +0000

Okay, I love the tax advantages of a Roth Individual Retirement Account, but I hate being told what I can and can’t invest MY money in. I could put it in a freakin’ triangular hole in the ground, if I felt like it. But anyway, I’m looking for a Roth IRA that will allow me to invest in:
1. Lending to people via Prosper.com
2. The deeds to rental properties that pay for themselves and pay into the account
3. Tax liens and/or tax lien certificates
4. Stocks

I want to invest in _all_ of those things. I DO NOT want to invest in annuities, cds, or mutual funds. Those pathetic investments are dead to me.

Does anyone know where to look for my desired IRA?

Where is there a good free online Roth Ira calculator?

admin — Mon, 11 Jan 2010 03:23:56 +0000

I’ve been able to find them before, but can’t now. One that takes what you’ve already invested, what you will invest per year for x amount of years and gives you an amount based on compounded interest?

NO SPAM PLEASE!

Are there any tax advantages in converting a rollover IRA into a Roth IRA?

admin — Wed, 06 Jan 2010 19:43:17 +0000

As I understand it, if I convert the rollover into a Roth, I will then have to report the entire amount on my taxes as income the year I do the conversion. So after “x” number of years when I’m ready to start taking money out of my Roth, won’t I get taxed again? Am I setting myself up to let the IRS tax me twice on some of the same money?

Why is there an upper income limit for contributing to a Roth IRA?

admin — Fri, 01 Jan 2010 00:26:56 +0000

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.

Is there an income limit on making a contribution to a traditional IRA?

admin — Sat, 12 Dec 2009 20:43:10 +0000

I know there are income limits on contributing to *Roth* IRA. I also know there are income limits on *writing off* a contribution to a Traditional IRA. I’m not asking either. I’m asking are there income limits on making a contribution to a Traditional IRA?