Any IRA
or Roth IRA account you choose to invest in is subject
to maximum contribution limits imposed by the Federal
Government. Here is a table summarizing the contribution
limits imposed:
| Year |
49 Years
& Less |
50 Years
& More |
| 2002 |
$3000 |
$3500 |
| 2003 |
$3000 |
$3500 |
| 2004 |
$3000 |
$3500 |
| 2005 |
$4000 |
$4500 |
| 2006 |
$4000 |
$5000 |
| 2007 |
$4000 |
$5000 |
| 2008 |
$5000 |
$6000 |
After the year 2008, there will be
increments of $500 per year (an amount that can be adjusted
depending on the levels of inflation in the country).
Therefore, in 2009, the Max Roth IRA contribution will
be $5500 and $6000 in the year 2010.
Contributions towards your Roth IRA
account do NOT have to be made in the form of a lump sum
payment. For example in the year 2008, you could contribute
$5000 / 12 months = $417 per month for 12 months. Or you
could contribute $5000 / 4 = $1250 every 3 months. Or
you could contribute $2500 every 6 months. You get the
idea?
However, note that the Roth IRA contribution
maximums cannot be carried front or back from year to
year. For example, if you contribute only $2000 in the
year 2007 (when the maximum was $4000), you CANNOT contribute
$7000 in 2008 ($2000 from the previous year and $5000
maximum of the current year). The maximum contribution
limits cannot be carried over to the next year.
Therefore, the general rule of thumb
is, you either contribute $4000 in the year 2006, and
if you fail to do so, too bad, you cannot make up for
it in the year 2007!
1) Income Limitations:
In order to be eligible to contribute towards a Roth IRA
account, you must make money in the form of compensation
income example salaries, tips, bonuses, professional consulting
fees, etc.
2) Age: There are
no age restrictions when contributing towards a Roth IRA.
3) Spouse Roth IRA:
You are allowed to make Roth IRA contributions on behalf
of your spouse, only if you meet the income requirements.
4) Time Factor:
As explained above, contributions towards a Roth IRA can
be made at anytime during the year. However, this year's
contributions cannot be rolled over to the following years.
