2013 Roth IRA income limits are issued by the US government and are of particular interested to anyone who is looking to contribute a part of this year’s earnings to their retirement fund. This article describes the dynamic of changes in these limits over the years and the current situation, which is slightly different from the previous year.
What is a Roth IRA?
Roth IRA is a retirement plan that allows you to redistribute a part of your income into a non-taxable retirement fund. Unlike most other tax advantaged retirement plans, it grants tax breaks when withdrawing from the fund, not upon your contribution.
This allows non-taxable growth and relieves all worries about future tax rates. Due to these extremely attractive terms, the US Congress has also placed various Roth IRA income limits in place to prevent high-income taxpayers from sheltering their income from taxes this way.
What Are Roth IRA Limits?
That’s why you can only contribute money to Roth IRA if your gross income for the year is under a certain government-issued threshold. In addition, the size of the contribution cannot exceed a certain amount.
The particular terms change from one year to another, so you need to be aware of the latest Roth IRA income limits in 2013 to see if you are still eligible and know how to go about your contributions.
The New Roth IRA Income Limits in 2013
So, what are the Roth IRA income limits in 2013, compared to the previous year? The eligibility threshold has increased from its 2012 value both for married couples and singles, allowing more people to take advantage of the unique tax advantages offered by Roth IRA.
The cut-off point is now $178,000 to $188,000 for married couples and $112,000 to $127,000 for individuals. This means that if you file individually and your gross income in that year exceeds $127,000, you won’t be given access to the terms of a Roth IRA plan.
Roth IRA Income Limits for Contributions
When it comes to your contributions, the Roth IRA plan specifies different limits for people aged 49 or less and those who are 50 years or older.
If your age is 50 years or more, the 2013 Roth IRA income limit in your case is $6,500. People who are younger than that will only be able to contribute $5,500 this year.
Both values have also moved up $500 since last year, making the contributions slightly more appealing in 2013.
You should be aware that the terms for 401K and other retirement plans have also gone through some changes. If you are interested in any of them and would like to see how they relate to the 2013 Roth IRA income limits, you should look up their updated values as well.
Please note that the deadline for making your contribution to Roth IRA for the year 2013 is in April 15th of 2014. You can only put money into your retirement fund until that date.
Now that you know the 2013 Roth IRA income limits, you can evaluate whether this retirement plan is going to work in your situation or you should look into other options, such as 401K.