IRAs Share Contribution Limits
Published in Tricks
All IRAs share contribution limits – from Traditional to Roth to SEP to any other IRA out there that may exist. If you have no income restrictions, then the limit is $4,000 for 2007, $5,000 if you’re 50 and over; so if you contribute $1,000 to a SEP-IRA as an employee, then you’re only allowed to contribute $3,000 to your Roth IRA.
Most of the time someone will contribute entirely to one type of IRA but sometimes you will see someone contribute to different types depending on their situation because of the different limitation rules of each IRA. Someone who is restricted to a maximum of $2,000 into their Roth IRA may opt to contribute the remaining $2,000 to a Traditional IRA, which has no contribution limit (its limits are for deductibility of those contributions).