The highest allowable amount an individual could deposit into a Traditional or Roth Individual Retirement Account (IRA) for the tax year 2015 was \$5,500. Furthermore, individuals aged 50 and over were permitted to contribute an additional \$1,000 as a “catch-up” contribution, bringing their potential maximum to \$6,500. This upper limit applied regardless of whether the IRA was a Traditional or Roth account.
Understanding the annual upper limit for IRA contributions is crucial for retirement planning. Adhering to these limits helps individuals avoid potential penalties and ensures they maximize the tax advantages associated with these accounts. The availability of catch-up contributions recognizes the need for older individuals to bolster their retirement savings and provides them with a mechanism to do so.
