Roth IRA Contribution Limits for 2021

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A Roth IRA is a type of retirement account in which your contributions are not tax-deductible, but once you start withdrawing the money, you don’t have to pay taxes on those withdrawals. This differs from a traditional IRA, which lets you make tax-free contributions but requires paying taxes on any withdrawals.

The advantage of a Roth IRA is that your contributions can grow tax-free, which will come in handy if you think you will be in a higher income bracket during retirement than when you’re working.

What Are the Roth IRA Limits for 2021?

There are limits to the amount of money you can contribute to your Roth IRA each year. Your age and income determine these amounts.

Roth IRA Limits by Age

If you are under the age of 50, the maximum contribution you can make to a Roth IRA in 2021 is $6,000. If you’re older than 50, the maximum is $7,000. This remains unchanged from the contribution limit in 2020.

Roth IRA Limits by Income

It’s also important to note that Roth IRA contributions are subject to income eligibility. This means the IRS places limits on how much you can contribute to a Roth IRA based on your modified adjusted gross income and filing status.

Retire Comfortably

Your income also determines how much money you can contribute each year to your Roth IRA. For 2021, you lose the ability to contribute the maximum amount to a Roth IRA if your income exceeds the following thresholds:

  • Married Filing Jointly: $208,00
  • Married Filing Separately and living together: $10,000
  • Single: $140,000
  • Head of Household: $140,000
  • Married Filing Separately and living apart: $140,000

Here’s another look at the Roth IRA earning limits and how they affect what you can contribute.

Filing Status Modified Adjusted Gross Income Contribution Limit
Married Filing Jointly or Qualifying Widow(er) Less than $198,000 Full amount
Married Filing Jointly or Qualifying Widow(er) Greater than or equal to $198,000, but less than $208,000 Reduced amount
Married Filing Jointly or Qualifying Widow(er) Greater than or equal to $208,000 None
Married Filing Separately — Living Together Less than $10,000 Reduced amount
Married Filing Separately — Living Together Greater than or equal to $10,000 None
Single, Head of Household or Married Filing Separately — Living Apart Less than $125,000 Full amount
Single, Head of Household or Married Filing Separately — Living Apart Greater than $125,000, but less than $140,000 Reduced amount
Single, Head of Household or Married Filing Separately — Living Apart Equal to or greater than $140,000 None

What Happens if You Exceed Roth IRA Income Limits?

Excessive contributions to your Roth IRA — more than the amount allowed — can result in a tax penalty of 6% or being forced to withdraw the amount over your contribution limit.

Limits for Couples

Contribution limits for couples vary depending on the filing status and living arrangements. For instance, a married couple filing jointly can contribute the full amount to a Roth IRA if their income is less than $198,000.

This limit changes to $140,000 for married couples who file separately and live apart. If a married couple lives together and files separately, they cannot contribute the full amount if their income exceeds $10,000.

Retire Comfortably

Roth IRA Limits With a 401(k)

If you or your spouse have an employer-sponsored retirement plan such as a 401(k), you might not be able to contribute to a Roth IRA. In some cases, your contribution limit is reduced. This applies if you or your spouse were covered at any time during the year.

Good To Know: CARES Act

The CARES Act lets individuals withdraw up to $100,000 from select retirement accounts — including IRAs. These rules apply to coronavirus-related distributions and are exempt from the 10% early withdrawal penalty.

You will have to pay income tax on the distribution, but you can opt to spread the tax liability over a three-year period. If you choose to repay the amount you withdraw — and complete that repayment within three years — you will not have to pay federal income tax on the distribution.

Backdoor Roth IRA

backdoor Roth IRA lets you convert your traditional IRA into a Roth IRA. This could provide a way to circumvent income limits. There is no limit on conversion amounts — you can roll over however much you have in your traditional IRA without any penalty.

This process is legal but complicated. You’ll have to pay taxes on your traditional IRA, and the amount you convert into the Roth IRA will likely count as income.

If you have a year when your income is particularly low, this is a good time to make the conversion because it helps lower the tax liability.

Also, if you’re younger than 59 1/2 years old and you convert funds from your traditional IRA into your Roth IRA, you’ll need to wait another five years to have penalty-free access to the money because the IRS treats conversions differently than it treats contributions.

Final Take

It’s to your advantage to keep track of the contributions you make to your Roth IRA. The custodian of your Roth IRA should send you IRS Form 5498.

Whatever you decide, talk to your tax accountant about it first and make sure you fully understand the tax implications.

This article has been updated with additional reporting since its original publication.

Information is accurate as of Feb. 18, 2021.

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.

About the Author

Barri Segal has 20+ years of experience in the publishing and advertising industries, writing and editing for all styles, genres, mediums, and audiences. She has been writing on personal finance topics for 12 years and gains great satisfaction from making a difference in consumers’ lives.

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