Saving money for your retirement years can be done quite effectively with a Roth individual retirement account (IRA). Your investments can grow tax-free in this kind of retirement account, just like in its cousin the traditional IRA. Additionally, you can withdraw your contributions—but not your earnings—tax-free at any time.
A Roth IRA may also permit tax-free withdrawals of earnings—earnings that would otherwise be taxable—under specific circumstances. These prerequisites include becoming a first-time homebuyer, being disabled, or turning fifty-nine years old.
A Roth IRA is a powerful retirement savings tool that allows you to grow your money tax-free. As a married couple, you may be wondering how much you can contribute to a Roth IRA together. This guide will answer your questions about Roth IRA contribution limits for married couples in 2023 and 2024.
Understanding Roth IRA Contribution Limits for Married Couples
The total amount a married couple can contribute to their Roth IRAs depends on their combined modified adjusted gross income (MAGI) and their age. Here’s a breakdown of the contribution limits for 2023 and 2024:
2023 Contribution Limits:
- MAGI Below $218,000: $6,500 per person, or $7,500 if you’re 50 or older.
- MAGI Between $218,000 and $227,999: The contribution limit gradually decreases as your income increases.
- MAGI Above $228,000: You are not eligible to contribute to a Roth IRA.
2024 Contribution Limits:
- MAGI Below $230,000: $7,000 per person, or $8,000 if you’re 50 or older.
- MAGI Between $230,000 and $240,000: The contribution limit gradually decreases as your income increases.
- MAGI Above $240,000: You are not eligible to contribute to a Roth IRA.
How to Calculate Your Combined MAGI
To determine your combined MAGI, follow these steps:
- Gather your tax information: This includes your Form 1040, Schedule 1, and any other relevant tax documents.
- Calculate your adjusted gross income (AGI): This is your total income minus certain deductions, such as contributions to retirement accounts.
- Add back certain deductions: This includes deductions for student loan interest, tuition and fees, and educator expenses.
- The resulting figure is your combined MAGI.
Spousal IRA Contributions
If only one spouse has earned income, the couple can still contribute to a Roth IRA for the non-working spouse through a spousal IRA. This allows the couple to contribute up to the maximum limit for each individual, even if only one spouse is earning income.
Maximizing Your Roth IRA Contributions
To maximize your Roth IRA contributions as a married couple, consider the following strategies:
- Contribute the maximum amount allowed each year: This will help you grow your retirement savings faster.
- Catch up contributions: If you are 50 or older, you can contribute an additional $1,000 per person each year.
- Invest your contributions wisely: Choose investments that have the potential to grow over time.
- Rebalance your portfolio regularly: This will help you maintain a healthy balance between risk and return.
By understanding the Roth IRA contribution limits for married couples, you can make informed decisions about how much to contribute and how to grow your retirement savings. Remember to consider your individual circumstances and financial goals when making your decisions.
What Are the Rules for Putting Money in a Roth IRA?
The majority of those with incomes will be able to contribute the maximum amount of $6,500 in 2023 ($7,000 in 2024) or $7,500 ($8,000 in 2024) for individuals 50 years of age and above. You may contribute partially to a Roth IRA if your income is within the phaseout range. If your modified adjusted gross income exceeds the thresholds, you are not eligible to make any contributions.
Roth IRA Eligibility
Having earned income is the primary prerequisite for making contributions to a Roth IRA.
Eligible income comes in two ways:
- You can work for someone else who pays you. That includes commissions, tips, bonuses, and taxable fringe benefits. Both W-2 employees and 1099 contractors would receive earned income.
- You manage your own farm or business, or you receive other forms of income that are considered earned income for the purposes of contributing to a Roth IRA. These consist of taxed alimony, military differential pay, and untaxed combat pay.
In 2023, the maximum amount that can be contributed to a Roth IRA is $6,500 (or $7,500 if you are over 50). In 2024, you can invest up to $7,000 (or $8,000 if you’re 50 years of age or older). Even if you produce more, those are the caps until the phase-out point. Contributions are based on earned income, but the phase-out is based on MAGI.
Unearned income includes all forms of passive investment income from stocks, real estate, and other assets. Therefore, it can’t be contributed to a Roth IRA. Other common types of income that don’t count include:
- Alimony (nontaxable)
- Child support
- Social Security retirement benefits
- Unemployment benefits
- Wages earned by penal institution inmates
The maximum age to contribute to a Roth IRA is indefinite. For instance, a young person working a summer job can open and fund a Roth IRA. (If they are underage, it may need to be a custodial account.) Conversely, a working individual in their seventies can still make contributions to a Roth IRA.
People of all ages can also contribute to traditional IRAs. Previously, individuals who had a traditional IRA were unable to contribute after the age of seventy-five. However, the Setting Every Community Up for Retirement Enhancement (SECURE) Act, which was passed in December 2019, removed the age limit on traditional IRA contributions.
Furthermore, participation in a qualified retirement plan does not affect your eligibility to contribute to a Roth IRA. Thus, you can fund your own Roth IRA after contributing to your employer’s 401(k) plan if you meet the eligibility requirements and have the funds.
Can My Spouse Have a Roth IRA?
FAQ
Can married couples both contribute to a Roth IRA?
What is the Roth IRA limit for married filing jointly?
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Single Filers (MAGI)
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Married Filing Jointly (MAGI)
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Maximum Contribution for individuals under age 50
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under $146,000
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under $230,000
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$7,000
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$147,500
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$231,000
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$6,300
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$149,000
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$232,000
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$5,600
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$150,500
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$233,000
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$4,900
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What is the limit for Roth IRA for spouse?
Can I contribute to a Roth IRA if married filing separately?
How much can a married couple contribute to an IRA?
Assuming that condition is met, it’s possible for married couples to contribute up to $12,000 to IRAs for 2022 or $14,000 if they’re both age 50 or older. For 2023, the amounts are $13,000 and $15,000, respectively. Traditional IRAs allow for tax-deductible contributions; Roth IRAs do not.
How much can you contribute to a Roth IRA?
What to know before contributing to a Roth IRA. The Roth IRA contribution limit for 2023 is $6,500 for those under 50, and $7,500 for those 50 and older. And for 2024, the Roth IRA contribution limit is $7,000 for those under 50, and $8,000 for those 50 and older.
How much can you contribute to a Roth IRA in 2022?
For 2022, the maximum annual contribution limit for traditional and Roth IRAs is $6,000 ($6,500 in 2023). An additional catch-up contribution of $1,000 is allowed for savers ages 50 and older for both 2022 and 2023. Your ability to make the full contribution to a Roth IRA depends on your filing status and modified adjusted gross income (MAGI).
Can a married person contribute to a Roth IRA?
Married filing separately and head of household filers can use the limits for single people if they have not lived with their spouse in the past year. Anyone of any age can contribute to a Roth IRA, but the annual contribution cannot exceed their earned income.