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You are here: Home / Roth IRA / 10 Roth IRA Mistakes That Could Cost You Thousands

10 Roth IRA Mistakes That Could Cost You Thousands

July 31, 2021 by Retirement

In 2021, adults under 50 may contribute up to $6,000 to a Roth IRA. Adults 50 and older may contribute up to $7,000. These limits apply to your total contributions to all IRAs, not just Roth IRAs. But you can choose how to split this up. You might put $3,000 in a traditional IRA and $3,000 in a Roth IRA. Or you could put all $6,000 in a Roth IRA and none in a traditional IRA.

Exceeding the annual contribution limit will bring a 6% penalty tax on the excess contributions until you remove them. But just because you can’t contribute more than $6,000 now (or $7,000 if you’re over 50) doesn’t mean you won’t be able to do so in the future. The government reevaluates the contribution limits every year and periodically increases them to allow people to save more.

Filed Under: Roth IRA

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