The IRS limits Roth IRA contributions based on household income.

Each year, the IRS publishes its inflation-adjusted income caps on Roth contributions. This is a range called the “phaseout.” Households with income below this range can make a full contribution to their Roth IRA. Above this range, a household cannot make any contributions. Within it, a household can make partial contributions.

In 2024, the phaseout is between $146,000-$161,000 for single filers or $230,000 – $240,000 for married filers.

So, for example, say that you are a single 35-year-old individual who makes $155,000. You can make a partial contribution to your Roth IRA. Specifically, you can contribute up to $2,800 to your Roth IRA. You can contribute another $4,200 to your traditional IRA.

Here’s how it works. You can also use this free tool to match with a fiduciary financial advisor if you have questions or are interested in personalized financial guidance.

IRA Contribution Limits

Each year the IRS sets a maximum contribution limit to IRA accounts. This is the maximum amount you can contribute to any tax-advantaged IRA. In 2024, that cap is $7,000 per person under the age of 50 and $8,000 for all individuals above that age. For married couples each individual has their own contribution limit, meaning a married household has a combined $14,000 under age 50 and $16,000 above it.

This cap is shared across all individual retirement accounts (IRAs). So, for example, say that you have both a traditional pre-tax IRA and a post-tax Roth IRA. An individual under the age of 50 might contribute $3,000 to their pre-tax IRA and $4,000 to their Roth IRA, keeping them within the $7,000 total limit.

This limit only applies to making contributions with earned income. It does not apply to Roth conversions using assets held in a pre-tax portfolio. You can convert any amount you would like, so long as it comes from an eligible tax-advantaged account. Roth conversions often have major tax implications, so consider consulting a financial advisor if your income is above the contribution limits and you want to plan a conversion strategy.

Roth IRA Phaseouts

The IRS applies an income limit to making contributions to a Roth IRA. This is based on your modified AGI, and is called the “phaseout.” Individuals who earn more than the current phaseout cannot contribute to a Roth IRA. This does not affect assets that you already hold in a Roth account, nor does it affect your ability to make a Roth conversion using eligible pre-tax assets.

Like contribution limits, the phaseout is adjusted each year to account for inflation. In 2024, the phaseout is set at:

Individual Filers

Below $146,000: Full contribution
Between $146,000 – $161,000: Partial contribution
Above $161,000: No contribution

Joint Filers

Below $230,000: Full contribution
Between $230,000 – $240,000: Partial contribution
Above $240,000: No contribution

So, for example, an individual making $75,000 per year can contribute up to $7,000 per year to their Roth IRA (or $8,000 if over the age of 50). An individual making $180,000 per year cannot contribute to a Roth IRA at all.

Here, we have an individual who earns $155,000 per year. They can make a partial contribution to their Roth IRA, assuming they are single.

The phaseout only applies to Roth portfolios, it does not apply to pre-tax IRAs. Any money that you cannot contribute to a Roth account due to the phaseout, you can contribute to a traditional IRA.

A financial advisor can help you understand the implications of your retirement plan contributions on your taxes and beyond. Get matched today.

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Calculating Partial Contributions

If your income falls within the narrow gap in the phaseout, you calculate your partial contribution as follows:

Take your modified AGI
Subtract the lower-bound of the range from your AGI (in 2024, that’s $146,000 single/$230,000 joint)
Divide this result by $15,000 single or $10,000 joint (the amount of the phaseout range)
Multiply this result by your maximum IRA contribution limit for the year (in 2024, that’s $7,000 under age 50/$8,000 age 50 or older)
Subtract your maximum IRA contribution limit for the year from the result in Step 4 to find your partial Roth IRA contribution limit

To see how this works, take our case here. We have an individual age 35 who makes $155,000 per year. Due to age his IRA contribution limit for the year is $7,000, and due to filing status his phaseout range is $146,000 to $161,000. Since his income falls in the middle of that phaseout range, we calculate his partial contribution as:

Modified AGI: $155,000
$155,000 – $146,000 = $9,000
$9,000 / $15,000 = 0.6
0.6 * $7,000 = $4,200 (age 50 or older: 0.6 * $8,000 = $4,800)
$7,000 – $4,200 = $2,800 (age 50 or older: $8,000 – $4,800 = $3,200)

This individual can contribute up to $2,800 to a Roth IRA this year. Since the phaseout does not apply to pre-tax IRA accounts, he can contribute the remaining $4,800 to a traditional IRA. If he is over the age of 50, his phaseout limit would be higher. With an $8,000 total contribution limit, he would be able to contribute up to $3,200 to a Roth IRA and the remaining $4,800 to a traditional account. And if he were married, his spouse’s income would also affect his potential contributions. Keep in mind, a financial advisor can help you make calculations based on your personal circumstances.

The Bottom Line

The IRS limits who can contribute to a Roth IRA based on income. If your household income is below the phaseout, you can make a full contribution to this post-tax account. If you fall within or above the phaseout, you can contribute either a reduced amount or nothing at all. This does not affect your ability to convert funds or contribute to a traditional IRA.

Tips On Building a Backdoor Roth

If you earn too much money to contribute to a Roth IRA, you can still fully fund this account with a technique known as the “backdoor Roth.” This is extremely useful for high-income households, but make sure to avoid these classic blunders.
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