Retirement Account Contribution Limits
Retirement account contribution limits change annually based on cost-of-living adjustments. Sterling tracks current and historical limits for IRAs and employer-sponsored plans.
Roth IRA Contributions
Roth IRA contributions have income phaseout ranges that vary by filing status. Clients whose income exceeds the upper limit cannot contribute directly. The phaseout reduces the maximum contribution proportionally within the range.
| Limit Type | Description |
|---|---|
| Contribution Limit | Maximum annual contribution below age 50 |
| Catch-Up Contribution | Additional amount allowed at age 50 and older |
| Income Phaseout | MAGI range where contributions phase out |
Traditional IRA Contributions
Anyone with earned income can contribute to a Traditional IRA. The tax deductibility depends on whether the client or spouse has access to an employer retirement plan and their income level.
Deductibility Rules
Even when contributions are not deductible, clients may benefit from Traditional IRA contributions. Sterling evaluates each household's specific situation when generating IRA recommendations.
Employer-Sponsored Plans
Sterling tracks contribution limits for all major employer plan types. Each plan has employee deferral limits, catch-up provisions, and total contribution limits.
- 401(k), 403(b), and 457(b) Plans share the same employee deferral limit
- SIMPLE Plans have lower limits but may include employer matching
- SEP IRAs allow employer contributions up to 25% of compensation
- Solo 401(k) combines employee and employer contribution opportunities
- TSP (Federal Thrift Savings Plan) follows the same limits as 401(k) plans
Catch-Up Contributions
Clients aged 50 and older qualify for additional catch-up contributions. Each plan type has its own catch-up amount. Sterling automatically considers a client's age when evaluating contribution opportunities.