The Individual Retirement Account, or IRA contribution limits change every year, depending on the Federal government's analysis of the changing standard of living rates across the country. For a long time these limits stood at $2,000 a year, but in 2008 they were raised. Now, investors with any type of Individual Retirement Account must check annually to determine whether the contribution amounts have changed from the previous year.
In 2008, the IRS raised the IRA contribution limit to $5,000 thanks to a higher price of living in our country. For 2009, this limit remains unchanged. Yet, there are some additional things to be considered.
First, the $5,000 yearly contribution limit is for the total contributions of all of your IRA and 401K accounts, even if they are different types of accounts. So, instead of investing this amount into each account, your total sum of all accounts must be at or under this limit.
Also, anyone who has reach or surpassed the age of 50 actually has a higher limit. There is now an allowed make-up contribution of $1,000 a year which is designed to allow older investors to put back more money as they are closer to the retirement age.
This means that if you are over 50 years old and have at least one IRA account, your limit will be $6,000 for the year.
There are additional IRA contribution guidelines which force some investors to phase out of these limits if they make a certain amount of money. Depending on the type of IRA account you have, you may find yourself with a much lower limit or unable to contribute to your accounts at all if your income is high enough.
To determine whether you fall within the phase out guidelines and have a lower limit, you will need to see the 2009 income limits for the particular type of IRA you are currently investing in.