The Roth IRA income limit to make a full contribution in 2024 is less than $146,000 for single filers, and less than $230,000 for those filing jointly. This means that if your income exceeds these thresholds, you may not be eligible to contribute the maximum amount to a Roth IRA for the year. It's important to be aware of these limits so you can plan your retirement savings accordingly.
If your income is less than $146,000 in 2024 and you're a single filer (or less than $230,000 for those married filing jointly), you can contribute up to $6,000 to a Roth IRA, with an additional $1,000 catch-up contribution if you're age 50 or older. This can be a valuable way to save for retirement, as Roth IRAs offer tax-free growth and withdrawals in retirement.
To be eligible to contribute the maximum amount in 2024, your modified adjusted gross income (MAGI) must be less than $146,000 (up from $138,000 last year) if you're a single filer, or less than $230,000 for those filing jointly. If your income exceeds these limits, you may still be able to contribute to a Roth IRA, but your contribution amount may be reduced or phased out entirely.
The IRS released 401(k) and IRA contribution limits for 2024, with higher limits than the previous year due to inflation. For employer-sponsored plans, including 401(k)s, the 2024 contribution limits allow for even more savings towards retirement. It's important to take advantage of these increased limits if you're able to do so, as saving more now can lead to a more comfortable retirement in the future.
If you're an ultrahigh-net-worth individual, there is good reason to reconsider or explore for the first time how a Roth IRA can support your retirement goals. While high earners may not be able to contribute directly to a Roth IRA due to income limits, a mega backdoor Roth strategy could be a beneficial alternative if your 401(k) plan allows for it. This strategy involves making after-tax contributions to a traditional 401(k) and then converting those funds to a Roth IRA, allowing for tax-free growth and withdrawals in retirement.
The best way to save for retirement is to start early and contribute often. Unfortunately, that's not always possible for everyone, especially if you're a high-earner who may be limited by income restrictions on Roth IRA contributions. However, there are still other retirement savings options available, such as traditional IRAs, 401(k) plans, and other investment accounts. It's important to explore all of your options and find the right mix of retirement savings vehicles to meet your financial goals.
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