Roth IRA Contribution and Income Limits 2024 - NerdWallet (2024)

A Roth IRA is a type of individual retirement account that allows for tax-free withdrawals in retirement. Contributions are made after-tax, meaning that you don’t get an upfront tax break like with a traditional IRA.

There are limits on how much you can contribute each year. Those limits depend on your income, your tax filing status, and other contributions you may have made to other IRA accounts.

Roth IRA contribution limits 2024

The Roth IRA contribution limit for 2024 is $7,000 for those under 50 and up to $8,000 for those 50 or older.

The cap applies to contributions made across all IRAs you might have. This means, for example, you can put some money in a Roth IRA, and some in a traditional IRA, but the combined contributions cannot equal more than $7,000 for those under 50, or $8,000 for those 50 or older.

Roth IRA income limits 2024

Roth IRA income limits are based on modified adjusted gross income, or MAGI, which is your adjusted gross income with some deductions added back in.

For example, if your MAGI is less than $146,000 in 2024 and you're a single filer, you can contribute the full amount. If your MAGI is between $146,000 and $161,000, your contribution is reduced as a single filer.

The table below covers how filing status and income limits determine the max Roth IRA contribution limit:

If your income reduces your Roth IRA contribution

Contributing to a Roth (if you’re eligible) can be a good option, even if your contribution is reduced because of your income.

Your money will still be contributed after taxes and you'll get to take qualified distributions from your Roth IRA tax-free in retirement. Assuming you follow the Roth IRA withdrawal rules, you won’t pay taxes on any investment growth.

You’ll also gain some valuable tax diversification in retirement: Because Roth IRA distributions aren’t included in your income in retirement, pulling money from that pot in addition to a traditional IRA or 401(k) could keep you in a lower tax bracket, potentially reducing your Social Security and Medicare taxes, which increase at higher income levels.

If your income exceeds the Roth IRA limits

If your income is too high, you won't be able to contribute to a Roth IRA directly, but you do have an option to get around the Roth IRA income limit: a backdoor Roth IRA. This involves putting money in a traditional IRA and then converting the account to a Roth IRA.

If you have a 401(k), you could also consider a mega backdoor Roth, though this process may be more involved and incur potential tax bills. Working with a tax professional who’s familiar with your financial situation could be helpful.

Other Roth IRA rules

Earned income restriction

The fine print on Roth IRA contribution limits is that you can’t contribute more than your earned income for the year.

If, say, your taxable compensation is $3,000, your Roth IRA contribution limit is also $3,000 for that year. If you don’t have any earned income during the year, you can’t contribute. (The exception is the spousal IRA, which allows a nonworking spouse to contribute to an IRA based on the taxable compensation of the working spouse.)

Excess Roth IRA contributions

Contributions in excess of the annual Roth IRA limits can trigger a penalty from the IRS that could easily wipe out any investment income.

But here’s the good news: You’re allowed to backtrack. If you realize your mistake prior to filing your tax return, withdraw the excess contributions and the earnings you received on them.

The other option is to reduce the following year’s contribution by the excess amount, but you’ll pay a 6% penalty on the excess that was contributed, for every year it remains in the account.

Contributing too much is a possibility, especially if you use more than one account. If you have questions about removing excess funds, it may make sense to work with a tax advisor.