Roth IRA Contribution Limits & Individual(k) Limits for Self Employed People

The Roth IRA contribution limits for the years 2003, 2004, 2005, 2006 and 2007 were greatly influenced by the Economic Growth and Tax Relief Reconciliation Act of 2002, which advocated for the increase in these Roth IRA contribution limits. A provision of the act known as the “Sunset Provision” made it official these that increases in contribution limits will only last till the year 2010, so now’s a good time to get into the Roth IRA! In 2010, the Congress will look at the total decline in revenues generated from these increased Roth IRA contribution limits, and whether these increases will become permanent or not.

The Roth IRA contribution limits are summarized in the table below:

Year Traditional Roth Traditional Roth Catch Up Simple Simple Catch Up 401k and 403b Plans 401k and 403b Catch Up Plans
2005 $4000 $4500 $10,000 $12000 $14000 $18000
2006 $4000 $5000 $10,000 $12500 $15000 $20000
2007 $4000 $5000 (Indexed) (Indexed) (Indexed) (Indexed)
2010 $5000 $6000
2009 $5000 $6000

Starting 2005, the Roth IRA contribution limits will be $4000, and will increase to $5000 in the year 2010. After 2010, the contribution limit will be incremented by $500 a year to adjust for cost of living and inflation. Therefore, the $5000 you are seeing for the 2009 column may not be entirely accurate, we will probably see $5500 in the column.

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