For 2024, you can contribute up to $7,000 to a traditional IRA. If you are age 50 or older, you are eligible for an additional catch-up contribution of $1,000, bringing your total maximum contribution to $8,000.
Understanding Traditional IRA Contribution Limits for 2024
The Internal Revenue Service (IRS) sets annual limits on the amount individuals can contribute to their Individual Retirement Arrangements (IRAs). These limits apply to your total contributions across all your traditional and Roth IRA accounts.
For the 2024 tax year, the contribution limits are structured as follows:
| Age Group | 2024 Traditional IRA Contribution Limit |
|---|---|
| Under 50 | $7,000 |
| 50 and Older | $8,000 |
The Catch-Up Contribution
The catch-up contribution allows individuals who are age 50 or older by the end of the calendar year to contribute an additional amount beyond the standard limit. This provision is designed to help older workers boost their retirement savings as they approach retirement age. For 2024, this additional amount is $1,000.
Key Considerations for Traditional IRA Contributions
When planning your traditional IRA contributions for 2024, keep the following important points in mind:
- Contribution Deadline: Contributions for the 2024 tax year can typically be made up until the tax filing deadline in April 2025 (e.g., April 15, 2025), excluding extensions.
- Earned Income Requirement: To contribute to a traditional IRA, you must have earned income at least equal to your contribution amount. Earned income includes wages, salaries, tips, and net earnings from self-employment. If your earned income is less than the maximum contribution limit, you can only contribute up to the amount of your earned income.
- Total IRA Contributions: The limits listed above apply to the total amount you contribute to all your IRAs (traditional and Roth combined). For instance, if you contribute $3,000 to a Roth IRA for 2024, you can only contribute an additional $4,000 (if under age 50) to a traditional IRA for the same year.
- Deductibility vs. Contribution: It's important to distinguish between contributing to a traditional IRA and deducting those contributions from your taxes. While the contribution limits dictate how much you can put into the account, the deductibility of your contributions may be limited based on your modified adjusted gross income (MAGI) and whether you or your spouse are covered by a retirement plan at work. You can still contribute the maximum amount to a traditional IRA, even if it's not tax-deductible.
Practical Examples
Understanding these limits with examples can clarify how they apply to your situation:
- Example 1 (Under 50): Sarah, who is 35 years old, earns a salary of $60,000 in 2024. She can contribute up to $7,000 to her traditional IRA for the year.
- Example 2 (50 and Older): David turns 52 in September 2024. Because he is age 50 or older by the end of the year, he can contribute up to $8,000 to his traditional IRA, including the $1,000 catch-up contribution.
- Example 3 (Combined IRA Contributions): Maria, age 40, wants to save for retirement. In 2024, she decides to contribute $2,500 to a Roth IRA. To reach her overall IRA contribution limit for the year, she can contribute an additional $4,500 to a traditional IRA ($7,000 total limit - $2,500 Roth contribution = $4,500 remaining).
For more detailed information on IRA contribution limits, you can refer to resources from reputable financial institutions like Fidelity Investments.
