What’s the IRA contribution limit in 2014?
Let’s cut straight to the chase –
IRA contribution limits in 2014 will remain the same as 2013 IRA contribution limits, with regard to Traditional, Roth, and SIMPLE IRA’s. The SEP-IRA contribution limit in 2014 has increased by $1,000.
However, eligibility limits have increased for almost all types of IRAs.
In other words: Most eligible participants can contribute up to the same maximum amount in their IRA in 2014 as they could in 2013. However, the qualification requirements have loosened slightly.
What are the IRA Contribution Limits in 2014?
The IRA contribution limits in 2014 remain at $5,500 for both Traditional and Roth IRAs for people ages 49 and under.
People ages 50 and higher are eligible to make a catch-up contribution of $1,000, for a total IRA contribution limit of $6,500.
SIMPLE-IRA contribution limits also remain the same in 2014 as it did in 2013. Eligible participants can contribute $12,000 into their SIMPLE-IRA, plus an additional $2,500 catch-up contribution if they’re 50 and older.
The SEP-IRA contribution limit has increased slightly, from $51,000 in 2013 to $52,000 in 2014, or a maximum of 25 percent of the employees’ salary, whichever is lower.
Both SIMPLE IRA’s and SEP-IRA’s are often established by small business owners and self-employed individuals.
Am I Eligible to Contribute to a Roth IRA?
The “income cut-off” to make contributions to a Traditional or Roth IRA has increased slightly.
In 2014, single individuals or heads-of-household will become phased out of Roth IRA eligibility when they reach $114,000 – $129,000 or more in adjusted gross income (AGI).
In 2013, by contrast, they would be phased out at $112,000 – $127,000 in AGI.
Married couples will be phased out of Roth IRA eligibility when they reach an AGI level of $181,000 – $191,000 in the year 2014. This is a $3,000 increase over their 2013 phase-out limits.
Am I Eligible to Contribute to a Traditional IRA?
The traditional IRA phase-out only applies to employees who are eligible to receive workplace retirement benefits.
In 2014, single individuals with a modified adjusted gross income (MAGI) between $60,000 – $70,000 or higher will be phased out of making tax-deductible contributions to a Trad IRA. In 2013, that cutoff was $1,000 lower.
Meanwhile, married couples with a modified adjusted gross income between $181,000 – $191,000 or more are phased out of tax-deductible Trad IRA contributions. That’s also a $1,000 increase over last year’s limits.
| 401k and IRA Contribution Limit | 2014 | 2013 |
|---|---|---|
| 401k Employee Contribution | $17,500 | $17,500 |
| 401k "Catch-Up" Contribution | $5,500 | $5,500 |
| 401k Total Contribution (Employer + Employee) | $52,000 | $51,000 |
| Defined Benefit Plan Limit | $210,000 | $205,000 |
| IRA Contribution (Traditional and Roth) | $5,500 | $5,500 |
| IRA "Catch-Up" Contribution (Traditional and Roth) | $1,000 | $1,000 |
| Trad IRA Phase-Out: Single w/ Workplace Benefits (MAGI) | $60,000 – $70,000 | $59,000 – $69,000 |
| Trad IRA Phase-Out: Married w/ Workplace Benefits (MAGI) | $96,000 – $116,000 | $95,000 – $115,000 |
| Roth IRA Phase-Out: Single or Head of Household (AGI) | $114,000 – $129,000 | $112,000 – $127,000 |
| Roth IRA Phase-Out: Married (AGI) | $181,000 – $191,000 | $178,000 – $188,000 |
| SIMPLE IRA Limit | $12,000 | $12,000 |
| SIMPLE IRA "Catch-Up" | $2,500 | $2,500 |
| SEP-IRA Employer Contribution | $52,000 | $51,000 |
| Solo 401k Employer Contribution | $52,000 | $51,000 |
| Saver's Tax Credit – Single (AGI) | $30,000 | $29,500 |
| Saver's Tax Credit – Head of Household (AGI) | $45,000 | $44,250 |
| Saver's Tax Credit – Married (AGI) | $60,000 | $59,000 |
Need help optimizing your retirement investments? Jemstep’s Portfolio Manager online software gives unbiased, expert advice to help you make better investment decisions. Sign up for FREE today!