When all that you read about retirement is harking on the save, save, save mentality, it’s a difficult concept to understand that you can save too much. Well, you can. There is such a thing as saving too much in your IRA. So what are those limits?
2017 IRA contribution limits
The limits for Traditional and Roth IRA contributions haven’t changed since 2016, they’re the same limit for 2017. The current combined annual limit stated by the IRS is:
- Under age 50: $5,500
- Age 50 or older: $6,500
Exceptions to IRA contribution limits
Since we’re dealing with the IRS, you probably are expecting there to be a couple of caveats to the above limits. First to note is that you’re not allowed to contribute more money than you earn annually. So if your taxable earnings for the calendar year is $5,000, that’s also what your IRA contribution limit will be.
Surprise, surprise, there’s a caveat to that caveat: If you’re a nonworking spouse, you can open what’s called a spousal IRA. So long as your spouse earns enough to cover the contribution. That means if both of you would like to contribute the maximum limit of $5,500 to an IRA, and you’re both under 50, your working spouse will need to earn at least $11,000.
Note that the contribution limit does not apply to a transfer from other retirement accounts, like a 401K rollover.