Individual Retirement Accounts (IRAs) have been around since they were created by the Employee Retirement Income Security Act (ERISA) of 1974 (Code §408). Roth IRAs, which were created by the Taxpayer Relief Act of 1997, began in 1998 (Code §408A). However, the rules relating to them are continually changing due to cost-of-living adjustments, court decisions, and IRS guidance. Here are some new considerations for 2018 and beyond.

Contribution Limits

When IRAs began, the maximum contribution was $1,500 per year, and there was no additional amount permitted as a “catch-up” for those age 50 and older. At that time, they were not serious retirement savings vehicles because of the low contribution limit. But things have changed. For 2018, the maximum contribution is $5,500, plus a $1,000 catch-up amount for those who will be at least 50 years old by the end of 2018 (Notice 2017-64). These limits were unchanged since 2013. But for 2019, the contribution limit will be $6,000, plus a $1,000 catch-up amount (Notice 2018-83).

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