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Saving for retirement is one of the primary goals of financial planning … and individual retirement accounts (IRAs) are one of the most important vehicles for achieving your retirement saving goals.

However, you can only put so much in IRAs each year. The U.S. tax laws include IRA contribution limits that restrict how much you can squirrel away in IRAs during the year. The amount you can put in a Roth IRA each year can also be reduced (potentially to zero) if your income is above a certain amount.

The good news is that the IRA contribution limits and Roth IRA income limits are adjusted each year to account for inflation. The IRS has released the new limits for 2024 and, thanks to the relatively high rate of inflation, you’ll be able to put more money in your IRA accounts next year than you can this year.

The IRA contribution limits for 2024 didn’t increase as much as they did last year because inflation isn’t as bad right now as it was a year ago. But this year’s increase is still more than what we’ve come to expect for most years over the past decade or so.

Check out the new IRA contribution limits and Roth IRA income limits below, and see just how much more you can save for retirement in 2024 with your IRAs.

Related: 401(k) Contribution Limits for 2024

Traditional IRAs vs. Roth IRAs

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Before getting into the IRA contribution limits and Roth IRA income limits for 2024, it’s probably best to explain the differences between traditional IRAs and Roth IRAs. The key difference is how—or should I say, when—they are taxed.

With a traditional IRA, your contributions are made with “pre-tax” dollars. That generally means contributions are tax-deductible in the year you make them (although your tax-deductible contributions might be limited if you or your spouse is covered by a workplace retirement plan or your income is too high). Money in the account then grows on a tax-deferred basis, and is subject to federal income tax when you make withdrawals in retirement.

On the other hand, contributions to a Roth IRA are made with “after-tax” dollars. In other words, they’re not tax-deductible. However, funds in the account grow tax free, so you won’t pay taxes on withdrawals in retirement.

In addition, you might also qualify for a tax credit of up to $1,000 ($2,000 for married couples filing a joint tax return) for putting money into either a traditional or Roth IRA. However, this credit—commonly called the Saver’s Credit—is only available to low- and moderate-income individuals. So, to claim the credit, your federal adjusted gross income (AGI) must be at or below a certain amount, which is based on your filing status.

Related: IRA vs. 401(k): How These Retirement Accounts Differ

Early Withdrawal Penalties

A 10% early withdrawal penalty might apply if you take money out of an IRA too soon.

With a traditional IRA, you might be hit with the penalty if you withdraw money from the account before you’re 59½ years old. The penalty is in addition to any income tax imposed on the amount withdrawn.

The penalty is less likely to apply when you take money out of a Roth IRA. Any contributions you make to a Roth can be withdrawn tax free and penalty free at any time. However, if you withdraw investment gains before age 59½, you might have to pay taxes and the 10% early withdrawal penalty.

There are exceptions to the 10% early withdrawal penalty, though. Penalty-free withdrawals from either a traditional or Roth IRA are possible if the money is used to pay certain education expenses. A one-time early withdrawal of up to $10,000 is also permitted if the money is used for a first-time home purchase. Other exceptions might also apply.

Finally, you’re also required to take out a certain amount of money from a traditional IRA each year when you turn 73 years old. These mandatory withdrawals are called required minimum distributions. They aren’t necessary with Roth IRAs, though.

Related: 10 Best Investments for Roth IRA Accounts

IRA Contribution Limits for the 2024 Tax Year

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For the 2024 tax year, the annual contribution limit for a traditional or Roth IRA is $7,000 for people under age 50 (up from $6,500 for 2023).

If you’re 50 or older, you can contribute an additional $1,000 for the 2024 tax year (same amount as in 2023). That means you can kick in a total of $8,000 for 2024 (up from $7,500 for 2023). The extra $1,000 is called a “catch-up” contribution.

The annual limits are combined limits that apply to all your traditional and Roth IRAs. So, for example, if you’re under age 50 and put $5,000 in a traditional IRA in 2024, then you can’t put more than $2,000 in a Roth IRA (or any other IRA) for the 2024 tax year.

YATI Tip: You have until the tax filing deadline for the year to make contributions to an IRA. So, for example, you have until April 15, 2024 (April 17 for residents of Maine and Massachusetts) to put money in an IRA for the 2023 tax year. If you request an automatic filing extension for your 2023 tax return, you’ll have until Oct. 15, 2024, to contribute to an IRA for the 2023 tax year. Similar deadlines will apply for 2024 IRA contributions.

Related: 10 Best Rollover IRA Accounts [Where to Roll Over a 401(k)]

Roth IRA Income Limits for the 2024 Tax Year

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The amount you can contribute to a Roth IRA might be less than the year’s IRA contribution limit (and possibly $0) if your income is above a certain amount. That’s because Roth IRAs also have income limits that you need to worry about if you’re a high-earner.

As with the basic IRA contribution limits, the Roth IRA income limits are adjusted for inflation each year. The IRS released the new income limits for 2024 when it announced the general IRA contribution limits.

For the 2024 tax year, the maximum amount you can contribute to a Roth IRA is gradually reduced to zero if your 2024 modified AGI is:

  • $146,000 to $161,000 for single and head-of-household filers ($138,000 to $153,000 for 2023)
  • $230,000 to $240,000 for joint filers ($218,000 to $228,000 for 2023)

That also means you can’t contribute to a Roth IRA at all for 2024 if your modified AGI for the year is:

  • $161,001 or more if you use the single or head of household filing status on your tax return ($153,001 for 2023)
  • $240,001 or more if you’re married and file a joint return ($228,001 for 2023)

If you’re married but file a separate tax return, your annual maximum contribution is gradually reduced to zero if your modified AGI is between $0 and $10,000.

Related: Roth IRA vs. 529 Plan: Which Is Better For College Savings?

Where to Open an IRA

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If you currently don’t have a traditional IRA or Roth IRA, perhaps now is the time to open one. Even if you have a 401(k) account through your employer, you can still contribute to an IRA—and save even more for retirement.

In fact, when starting a retirement plan and building retirement savings, it’s common to use a variety of retirement accounts at once (this can include the use of health savings accounts, too). You can also use a mix of traditional and Roth accounts for greater tax diversification.

So, if you’re looking to open an IRA, we suggest going with a highly reputable financial institution. You can learn more about two such IRA providers that we recommend below.

SoFi Invest IRAs

sofi rollover ira signup

  • Account minimum: None
  • Minimum initial deposit: None
  • Fees: No annual or opening fees; $20 closing fee

SoFi offers many perks to its customers, including no annual or opening fees on many different account types. Its SoFi Invest traditional IRA or Roth IRA could be a good choice if you’re an existing SoFi customer.

SoFi offers two options catering to different investment styles. Its active investing option lets you choose and manage your own investments. And with its automated investing option, SoFi will select and manage investments on your behalf.

You won’t pay management fees with either account option, and SoFi doesn’t charge commissions for stock or ETF trading. Several other investment choices are also available, including options and margin trading. However, underlying fund fees may apply depending on the investments you choose, and you will have to pay a modest $20 fee to close your account.

As a platform: SoFi’s interface is still very much geared toward younger, less experienced investors—everything is focused on simplicity and ease of use, rather than an expanse of sophisticated tools. SoFi also offers budget-friendly features such as fractional shares, which allow you to invest for as little as $1.

Betterment IRAs

betterment ira signup

  • Account minimum: None
  • Minimum initial deposit: $10
  • Fees: $4/mo. or 0.25% annually

Investing in ETFs can be a smart way to diversify your portfolio, and Betterment’s traditional IRAs and Roth IRAs are ideal vehicles for ETF investments—which are the only option available in the account.

Betterment offers several low-cost ETFs from major fund providers that align with different themes and investments. If you’d like to invest in socially responsible companies, for example, you might choose to buy shares of its Broad Impact ETF, which focuses on companies highly ranked for environmental, social, and governance (ESG) factors.

Keep in mind that Betterment is primarily a robo-advisor, so if you prefer to be hands-on with your investments, it might not be the best choice. That said, you can connect with human advisors to get guidance on your account. The option to talk with a financial professional makes Betterment fairly unique among robo-advisors.

Betterment charges an annual fee of 0.25% or a monthly fee of $4. You can upgrade to Betterment Premium for an additional 0.15% add-on fee to receive on-demand support from a Certified Financial Planner™. Upgrading requires a $100,000 minimum balance required in cash, stocks, bonds, or crypto holdings.


Rocky has been covering federal and state tax developments for over 25 years. During that time, he has provided tax information and guidance to millions of tax professionals and ordinary Americans. As Senior Tax Editor for Young and the Invested from Jan. 2023 to Feb. 2024, Rocky spent most of his time writing and editing online tax content.

Before working for Young and the Invested, Rocky was a Senior Tax Editor for Kiplinger, where he wrote and edited tax content for Kiplinger.com, Kiplinger’s Retirement Report and The Kiplinger Tax Letter. Prior to his time at Kiplinger, Rocky was a Senior Writer/Analyst for Wolters Kluwer Tax & Accounting. In that role, he managed a portfolio of print and digital state income tax research products, led the development of various new print and online products, authored white papers and other special publications, coordinated with authors of a state tax treatise, and acted as media contact for the state income tax group (where he was quoted as an expert by USA Today, Forbes, U.S. News & World Report, Reuters, Accounting Today, and other national media outlets). Before that, Rocky was an Executive Editor at Kleinrock Publishing, which provided tax research products for tax professionals. At Kleinrock, he directed the development, maintenance, and enhancement of all state tax and payroll law publications, including electronic research products, monthly newsletters, and handbooks.

Rocky has a law degree from the University of Connecticut and a B.A. in History from Salisbury University.