Overview Of 2010 IRA Contribution Limits
Most of us don't think much about our retirement until we actually get close to it ourselves. But it is important to make sure we are prepared for it, and an IRA can help in this respect.
An IRA is an individual retirement account, and everyone should ideally have one. The money you put into this should be saved until you retire, so that you can get the best out of it and have enough money to fund your lifestyle after you retire.
The amount you can put into this plan depends on your age. The contribution limits for 2010 are unchanged from 2009, and amount to $5,000 per year if you are aged 49 or younger. If you are older than this the allowance goes up to $6,000 a year. Needless to say you need to try and put away the maximum amount every year if you can, in order to have the largest possible pot of cash available when you retire.
The Roth IRA has different limits to consider, and these are $105,000 to $120,000 for a single person and $167,000 to $177,000 for a married couple if both parties file at the same time. If you don't yet have a plan it is important to check to see which one would be applicable for your needs before trying to go ahead with it.
The amounts applicable to a simple IRA have also remained unchanged for 2010 and stand at $11,500 for a person under 49 years of age. The upper age limit has a slightly higher contribution ceiling of $14,000
The other IRA plan you might see is the SEP IRA plan. The letters SEP in this case stand for Simplified Employee Pension. The difference with this plan is that there is no difference in the amount you can put into it depending on your age. $49,000 is the largest amount you can put into it for the year 2010, and the maximum amount of compensation you can expect for that year, if applicable, is $245,000.
As you can see the amounts vary between different versions of the IRA accounts. Make sure you know which type you have and how the new amounts (if they have changed) will affect you. And if you have not yet opened an IRA account perhaps now is the time to do so. It will directly affect your future retirement.
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Author: Ben Lardes