Question

John, a single man, is not covered by another qualified plan and earned $120,000 at his job in 2017. How much can he contribute to a traditional IRA or to a Roth IRA in 2017?

Answer 1

Answer The total contribution of John in IRA as per IRA Rules 2017 is $5500 with additional contribution of $1000 which can be made if age is 50 years pr above.

The total collectove contribution from all the accounts of IRA John might be having it will not exceed $5500 with $1000 as additional limit in case of 50 year or above.He ca contribute this amount one time or in small monthly installments which will auto debit from his account.

The limit of contribution to traditional IRA or Roth IRA are same with only difference of tax treatments.

In traditional IRA the contributions are allowed as tax deductions but the withdrwals from the IRA account is taxable income.

But In Roth IRA along with contributions as tax deductible the withdrwals are also tax free.Hence Roth IRA is 100% tax free.