Here's How Much You Can Contribute to an IRA in 2024

If you hope to retire someday, you should take proper steps to prepare financially. Many people contribute to individual retirement accounts (IRAs) to build a nest egg for their retirement years. These investment accounts provide tax breaks.

With a traditional IRA, you can contribute pre-tax income. Some or all contributions may be tax deductible. These contributions grow tax-free until you withdraw money in your retirement years.

Roth IRA contributions are made with after-tax dollars (contributions aren't tax deductible). However, when you withdraw money in retirement, you won't be taxed.

IRA contribution limits have increased for 2024, and taxpayers can benefit.

Taxpayers can boost their IRA contributions in 2024

Taxpayers can contribute more money to their IRAs this year. The annual contribution limit for the 2024 tax year is $7,000, up from $6,500 in 2023. The IRA catch-up contributions limit for adults age 50 and older remains $1,000 in 2024, allowing for up to $8,000 in total contributions.

These limits apply to traditional IRAs and Roth IRAs. You must have earned income in 2024 to contribute to an IRA, and your contributions can't exceed your household earnings for the year. Keep reading to review additional IRA guidelines for 2024 so you know what to expect.

Traditional IRA deduction rules for 2024

Anyone with earned income, even high earners, can contribute to a traditional IRA. A benefit of a traditional IRA is that some or all of your contributions may be tax deductible. However, some taxpayers may be ineligible to deduct their contributions.

If you or your spouse are covered by a workplace retirement plan, you can only take a deduction if you meet the income thresholds. The income limits have been adjusted for 2024.

Here's an overview of the income limits for 2024:

• Single filers with incomes above $87,000 who are covered by a workplace retirement plan can't take a deduction. The ability to use a deduction begins phasing out with incomes above $77,000.
• Married couples filing jointly with incomes over $143,000 who are covered by a workplace retirement plan can't take a deduction. The ability to use a deduction begins phasing out with incomes above $123,000.
• If you don't have a workplace retirement plan, but your spouse is eligible for one, you can claim a full deduction with income between $230,000 and $240,000. You can't take a deduction if your income is above $240,000.

If you or your spouse doesn't have a workplace retirement plan, a full deduction can be taken.

Roth IRA income limits for 2024​​

You can contribute to a Roth IRA if you meet the income thresholds. Taxpayers planning to contribute to a Roth IRA should review the 2024 income phase-out ranges, as they've been adjusted. Here's an overview of the income limits for the 2024 tax year by filing status:

• Single filers can contribute to a Roth IRA with incomes up to $146,000. For those with incomes above $146,000, contribution limits begin to phase out, while those earning $161,000 or more are ineligible to contribute to a Roth IRA.
• Married couples filing jointly can contribute to a Roth IRA with incomes up to $230,000. For couples with incomes above $230,000, contribution limits begin to phase out, while couples earning $240,000 or more aren't eligible to contribute to a Roth IRA.

Don't neglect to plan for retirement

Ensure you don't get too focused on your current personal finance needs that you neglect to plan for your retirement years. Investing in brokerage accounts like IRAs is one way to invest in your future. You can open an IRA through a brokerage firm.