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No matter what kind of IRA you
have --regular or Roth -- you are limited in the amount
the federal government allows you to contribute each
year.
In 2005, $4,000 was the maximum
contribution for individuals under 50. If you were
50 or older, you were eligible for a $500 extra
"catch-up" contribution, bringing your
allowable total to $4,500. In 2006-2007, $4,000
will remain the IRA limit for those under 50, while the
maximum total for those using the catch-up rises to
$5,000. In 2008, maximum
contributions will increase to $5,000 without catch-up,
and $6,000 with it. After 2008, the contribution
limit will rise in increments of $500, depending upon
the level of inflation. Remember,
IRA contributions do not have to be made at the same
time. Many people make smaller deposits each month
until they reach their maximum contribution. (For
example, a 50-year old woman who is entitled to
contribute $5,000 in tax-year 2006 could decide to pay
in $416.66 every month from January to December.) And
you still have until April 15, 2007 to contribute to
your IRA for tax year 2006. Source:
aba.com
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