Roth IRA Limits Are Going Up in 2024 -- Can You Contribute?

For the second year in a row, the contribution limits are increasing for people who want to save money in a Roth IRA (individual retirement account). But since the Roth IRA was meant for low-to-moderate income earners, you'll have to meet the income requirements to gain direct access to the account in 2024. Fortunately, the income ranges for the Roth IRA are also going up in 2024, allowing you to earn more money and still take advantage of the Roth account.

But if you've hit the six-figure mark and aren't sure if you still qualify to contribute to a Roth IRA, we've jotted down the most important numbers you need to pay attention to in 2024.

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Roth IRA contribution limits are rising in 2024

First, let's start with the new contribution limits. For 2024, the Roth IRA contribution limits are going up $500. That means you'll be able to stash away up to $7,000 in a Roth IRA in 2024, up from $6,500 in 2023. If you are 50 or older, your maximum contribution limit is capped at $8,000.

Keep in mind that you can only contribute money to a Roth IRA if you have earned income for the year. Also, you are not allowed to contribute more than you've earned. Let's say you are 72 years old and earn $5,000 from a part-time job. Instead of having a maximum contribution of $8,000, your contribution would be limited to your earned income, which is $5,000 for 2024.

Data: IRS. Chart by author.

Don't forget about the income requirements

Before you start celebrating the higher contribution limits for Roth IRAs, you'll want to make sure you qualify to make contributions to the account. The good news is that the income ranges are higher for 2024, so more people may have a chance to make direct contributions to a Roth IRA. And the more money you contribute to a Roth IRA, the more tax-free income you have a chance to rack up during retirement.

Let's say you file taxes as single or head of household and you are 45 years old. You are allowed to contribute the full $7,000 to your Roth IRA if your modified adjusted gross income (MAGI) is less than $146,000 in 2024. That's up from $138,000 in 2023. And if you are married filing jointly, you can make a full Roth IRA contribution if your income is under $230,000 in 2024.

But after your income surpasses those numbers, you'll have to pay close attention to your contribution limits. For single and head of household filers with income between $146,000 and $161,000, the maximum contribution limit drops. Your ability to make direct contributions to a Roth IRA goes away completely when your income exceeds $161,000 if you are filing as single or head of household. The ceiling for married individuals filing jointly is $240,000, which is up from $228,000 in 2023.

Data source: IRS.

Data source: IRS.

Review your sources of income

All money that goes into your pockets doesn't automatically qualify you to make contributions to a Roth IRA. You need to have earned income for the year, such as wages, salaries, and tips, to be eligible to make contributions to a Roth IRA. The following sources of income typically do not count toward your earned income calculation:

• Annuity income
• Dividends
• Interest income
• Rental property income
• Social security benefits
• Pension income

Make the most of your 2024 Roth IRA contributions

Review all your potential income sources to determine if you might have a shot at making direct contributions to a Roth IRA in 2024. If you are a candidate, make sure you contribute as much as you can so you don't miss out on the benefits of a Roth IRA. Since the Roth IRA doesn't come with required minimum distributions, you can leave the money in your account for as long as you want and continue to earn tax-free income every year during retirement.