IRA limits & eligibility
Traditional and Roth IRA contribution limits for individuals.
Contribution limits are subject to annual cost of living adjustments as set forth in the Pension Protection Act of 2006. If you're over age 50, you may qualify for an additional catch-up contribution.
| Year | Individual contribution limit | Catch-up for those 50 or older |
| 2011 | The lesser of earned income or $5,000 | $1,000 |
| 2012 | The lesser of earned income or $5,000 | $1,000 |
Contribution limits for married couples
The contribution limits apply to each individual, so married couples may be able to contribute the contribution limit for both spouses. For example, in 2012, a married couple, both of whom are over age 50, may contribute a total of $12,000 ($6,000 each, if there is enough earned income to support this level of contribution).
NOTE: You may continue to fund your IRA for 2011 through April 17, 2012.
| 2011 | |
| Traditional IRA | You (and/or your spouse if applicable) have earned income of at least the amount of the total contributions. You (or your spouse, if your spouse's IRA) are under age 70 1/2 at the end of the year that the contributions are made for. |
| Roth IRA | You (and/or your spouse if applicable) have earned income of at least the amount of total contributions. No age limit Whether or not you can make a full contribution depends on your tax filing status and modified adjusted gross income (MAGI): Single: MAGI less than $107,000 for a full contribution or $107,000 - 122,000 for a partial contribution Married filing jointly: MAGI less than $169,000 for a full contribution or $169,000 - 179,000 for a partial contribution Married filing separately: MAGI $0 - 10,000 for a partial contribution; MAGI greater than $10,000, a contribution is not allowed |
| 2012 | |
| Traditional IRA | You (and/or your spouse if applicable) have earned income of at least the amount of the total contributions. You (or your spouse, if your spouse's IRA) are under 70 1/2 at the end of the year that the contributions are made for. |
| Roth IRA | You (and/or your spouse if applicable) have earned income of at least the amount of total contributions. No age limit Whether or not you can make a full contribution depends on your tax filing status and modified adjusted gross income (MAGI): Single: MAGI less than $110,000 for a full contribution or $110,000 - $125,000 for a partial contribution Married filing jointly: MAGI less than $173,000 for a full contribution or $173,000 - $183,000 for a partial contribution Married filing separately: MAGI $0 - $10,000 for a partial contribution; MAGI greater than $10,000, a contribution is not allowed |
Credit card debt is a major problem in this country. While not everyone has a credit card, those that do typically carry a balance. The interest rate on a credit card balance is usually between 10-30% APR. These high interest rates make it difficult for people to pay down their debt -- especially if only making the minimum payment. In fact, just making minimum payments can make even the smallest balance over a decade to pay off and thousands of dollars in finance charges. It’s no wonder getting out of debt seems so hard.
Fortunately, you can get out of debt. If you follow a few basic steps and put a plan in place, you can work to pay off your debt sooner, with less interest, and improve your credit score in the process.
- First, list each of your credit cards. You’ll want to include the outstanding balance, interest rate, and minimum payment. This information can easily be found on your last monthly statement.
- Order the cards on the list so that the credit card with the highest interest rate is at the top, and the lowest is at the bottom.
- Total the minimum payments.
- The total monthly minimum is your absolute lowest monthly payment, but remember, we want to pay more than the minimum in order to repay the debt quickly. So, take a look at your budget and see how much extra you can come up with each month in addition to the minimum. Whether it’s an extra $20 a month or $100, every little bit helps.
- As your payments come due, pay the minimum on each card except for the one at the top of your list. Remember, that one has the highest interest rate and it costing you the most money by maintaining a balance. So whatever additional money you budgeted in the previous step, apply that to that card.
- Continue this process until the first card is paid off. When that card is paid off, continue with the minimum payments on the other cards, but now take the amount you were paying on the first card in addition to the minimum payment and apply it to the second card on your list.
- Repeat this process until all cards are paid off.