Question 1

What is the 2024 IRA contribution limit?

Accepted Answer

The 2024 IRA contribution limit is $7,000 for individuals under age 50. Those 50 and older can make an additional $1,000 catch-up contribution, totaling $8,000. This limit applies to combined Traditional and Roth IRA contributions.

Question 2

What is the difference between Traditional and Roth IRA?

Accepted Answer

Traditional IRA offers tax deduction on contributions and tax-deferred growth, but withdrawals are taxed as ordinary income. Roth IRA has no upfront tax deduction, but contributions grow tax-free and withdrawals are tax-free in retirement. Choose based on current vs future tax rates.

Question 3

Who can contribute to a Roth IRA?

Accepted Answer

Roth IRA has income eligibility limits. For 2024, single filers with modified AGI under $146,000 can contribute full amount. Those earning $146,000-$161,000 can contribute reduced amounts. Married filing jointly limits are $230,000-$240,000. Traditional IRA has no income limits for contributions.

Question 4

When can I withdraw from IRA without penalty?

Accepted Answer

Traditional IRA withdrawals before age 59.5 incur 10% penalty plus income tax. Roth IRA contributions (not earnings) can be withdrawn anytime without penalty. Earnings withdrawal penalty-free after 59.5 and account open 5+ years. Exceptions exist for first home purchase, education, and disability.

Question 5

Should I prioritize 401(k) or IRA?

Accepted Answer

Best order: First, contribute to 401(k) enough to get full employer match (free money). Then max out IRA ($7,000) for broader investment options and tax flexibility. Finally, contribute remaining 401(k) capacity. This sequence optimizes employer match, flexibility, and tax diversification.

IRA Calculator

IRA Details

IRA Results

Traditional IRA Tax Impact

IRA Comparison