Traditional IRAs have the same contribution limits as Roth IRAs.
For 2017, your total contributions to all of your traditional and Roth IRAs cannot be more than:
- $5,500 ($6,500 if you’re age 50 or older), or
- your taxable compensation for the year, if your compensation was less than this dollar limit.
These contribution limits apply to your total contributions, that is all of your traditional and Roth IRAs combined.
Any contributions above this amount will be subject to a 6% tax per year as long as that money remains in your IRA account. The tax can’t be more than 6% of the combined value of all your IRAs as of the end of the tax year.
There are other differences that are unique to traditional IRAs when it comes to contributions.
With traditional IRAs, you can’t contribute in the year you reach the age of 70½, so if you’re getting close to retirement, you may want to consider contributing before you get to this milestone age. (Though the IRS will still allow “rollover contributions” to a traditional or Roth IRA regardless of age and contributions to a Roth IRA are generally OK after 70½.)
What you may lose is a key benefit due to this age restriction: Traditional IRAs may be tax deductible, while Roth IRAs are not.