YOU ASK:

What are the traditional IRA contribution limits for 2006, 2007, 2008, and 2009?

WE ANSWER:

A participant in a traditional IRA is allowed to invest up to 100 percent of their compensation into their retirement plan. However, the amount of investment is subject to certain contribution limits which are fixed and adjusted for every tax year, according to inflation and the cost-of-living index.

In the past, traditional IRA contribution limits stayed at $2,000 for years but they have been increasing ever since. As Table 1 shows, traditional IRA contribution limits for 2006 and 2007 were $4,000, and 2008 and 2009 tax years saw yet another increase in the traditional IRA contribution limits.

In addition to the regular contribution, if you reach age 50 before the end of the year, you are entitled to an additional (so called catch-up) contribution of a maximum of %1,000.

Tax Year Regular Contribution Additional Catch-up Contribution
2006 $4,000 $1,000
2007 $4,000 $1,000
2008 $5,000 $1,000
2009 $5,000 $1,000
2010 Indexed for cost-of-living adjustments (COLA) Indexed for inflation

Table 1. Traditional IRA contribution limits (2006-2010)

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