It has been suggested that at some point in the relatively near future that individual retirement accounts may be an endangered species and that in short order the federal government will eliminate tax advantaged retirement accounts in favor of something that generates more revenue for federal programs. IRA contribution limits will be affected if the Congress is able to abolish individual retirement accounts. You will have your IRA contribution limits set to zero and you simply will not gain any tax advantage by being invested in an IRA. This is unfortunate as IRA’s have had many tax advantages for retirees for years and they clearly serve a purpose but it would seems that the government is heading in the direction of a central planning organization whereby they would control more of our money.

This has interesting implications on the citizens of the United States who invest in retirement accounts. It is a tricky line to walk. One must be careful about the current laws when tax planning for retirement and that, after all, is the purpose of the IRA, especially the Roth. However, it is also important to be mindful of the trends and anticipate changes in order to be fully prepared. IRALIMITS.NET is a site that is dedicated to staying at the forefront of IRA rules and we put serious thought into the sustainability of the rules. But, we are also not able to predict the future.

The key is to differentiate between what could happen and what mathematically HAS to happen. For instance, in the case of the US debt, either services have to be reduced or taxes have to be raised at some point in the future or there will be a negative event. In other cases, when a thing is not a certainty, it is just pays to be smart. I realize that that’s a glib remark, but it’s the most basic way to state the premise.

However, before we can talk about where the IRA contribution limit rules are heading let’s first look at where they currently stand.

At the time of this writing the IRA contribution limits laws are as follows: Currently the US government allows a limited contribution to your individual retirement account each year. At the moment your IRA contribution limits are independent of inflation. There is simply a set amount that you can enter into your IRA each year. This will not always be the case. New provisions have been made to anticipate changes in inflation and how IRA contribution limits will be affected over time. When the limits switch over to being tied into inflation, then they will adjust each year. Currently, your annual contribution limit is contigent upon your age at the time of the deposit into your IRA.

Remember that your IRA limits are annual, not one time affairs. For instance, if you are a 35 year old woman in 2009, you could deposit $416.67 per month. After twelve months your deposit will reach the maximum annual contribution limit of $5000.

Current IRA Contribution Limits

At present the maximum IRA contribution for a person under 50 years of age is $5000. For a person over 50, it is $6,000. This number will be periodically altered in the future. It is indexed to price inflation.

For the moment, IRA contribution limits are set in stone at the levels that I have indicated above. We do not know exactly where they will be in the future or how IRA policy will change. For that reason it is important to stay abreast of changes. We believe that reading sites like IraLimits.net is insufficient for most and that a retirement planner should be consulted in making certain that your retirement and IRA plans are sufficient to meet your goals.