Today, all investors with any type of IRA account have to check the current IRA contribution limits to determine how much money they are allowed to invest over the course of the year. For many years the limit was stable at $2,000, but in recent years the IRS started to raise that amount based on the rising cost of living across the country.
Due to considerable increases in the national cost of living in our country, the IRS raised the maximum contribution to $5,000 in 2008. For the 2009 IRA limits, this limit remains the same but there are some other things to consider before assuming this is your limit.
The first note that every investor must understand is that this maximum limit is a combination figure for every IRA account you take out. So, if you have two separate IRAs, the combined contributions of both will have to fall within your maximum limit.
Anyone who has reached the age of 50 or older is also allowed an extra $1,000 for the year. This is part of a program which allows older investors to put extra money into their accounts to help toward retirement.
Again, this extra contribution is a total for all IRA accounts a person may have.
Also, there is a phase out system where those who fall in higher income brackets may be forced into lower yearly limits. Some who make a lot of money may not be able to contribute at all because they exceed the maximum income allowed for contribution to their specific type of IRA. There are separate figures for each type of IRA.
If you make a decent salary, make sure to check out the 2009 IRA limits for your specific type of account. How much you will ultimately be able to contribute in 2009 depends on these numbers. You may even find yourself unable to contribute if your income is high enough.