The 2012 Roth IRA limits and Roth 401k contribution limits were just announced, so you can start planning your contributions. The new limits will go up for the Roth 401k; the Roth IRA limits remain unchanged and will be the same as the 2011 Roth IRA limits.
The 401k limits and IRA limits are determined based on inflation, and while there increases in the 2012 social security wage base and 2012 Roth 401k limits, there were no increases for any IRA limits.
I highlight the Roth IRA and the Roth 401k because they are my favorite retirement plans; although the limits for traditional 401ks and IRAs are the same as the Roth 401k and Roth IRAs.
2011 & 2012 Contributions
Here are the official contribution limits from the IRS:
| Roth 401k Contributions | 2011 | 2012 |
| Maximum | $ 16,500 | $ 17,000 |
| Catch-up 50 and over | $ 5,500 | $ 5,500 |
| | |
| Roth IRA Contributions | 2011 | 2012 |
| Maximum | $ 5,000 | $ 5,000 |
| Catch-up 50 and over | $ 1,000 | $ 1,000 |
You can make your 2012 contributions as early as January 2 for the whole year. If you contribute 2012 Roth IRA money between January 2 and April 15, be sure to designate calendar year 2012 if you have already contributed the maximum for 2011.
To maximize your IRA investments, make sure you aren’t paying extra fees in your IRA. You can transfer your IRA to Scottrade to avoid annual fees.
2011 Contributions
The deadline for 2011 IRA contributions is April 15, 2012.
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Using a Roth IRA for retirement is a great plan, especially if you’re young like me. I love the idea of having tax free withdrawals!! It’s a shame that the IRA limits didn’t go up this year, but it should have been expected. With very little inflation this year, nothing really went up.
Good info. I had forgotten that you could wait till April 15th to contribute to your IRA for the prior year. I’ll have to take advantage of that!
The company I work for offers both the 401K and Roth 401K. I’m 43. Is there a maximium limits for both or can the total of both not exceed $16,500 annual?
Mark,
The total of the traditional 401k and Roth 401k added together cannot exceed the $16,500 limit.
Does my contribution to a Roth 401K affect the maximum I can contribute to a Roth IRA? Specifically, can I contribute both 16.5K to the Roth 401K and 5K to the Roth IRA in 2011?
Alan,
Yes, you can contribute both the $16,500 to a Roth 401k and $5,000 to a Roth IRA.
The last two answers on this page appear to contradict one another.
Answer to Alan: Yes, you can contribute both the $16,500 to a Roth 401k and $5,000 to a Roth IRA.
Answer to Mark: The total of the traditional 401k and Roth 401k added together cannot exceed the $16,500 limit.
Which is correct????
Terri,
They are actually both correct.
The limits are $16,500 for a 401k (Roth 401k, traditional 401k, or a combination of both) and $5,000 for an IRA (Roth IRA, traditional IRA or a combination of both).
401ks and IRAs each have separate limits. It gets confusing because there are Roth and traditional accounts for both the 401k and IRA.
Do the 401k contribution limits include employer contributions?