personal finance

Question

Adrian's annual salary is $111,000. He is not eligible for a Roth IRA because he makes too much money. His company offers a matching program that is 1:1 up to 3% of annual salary.

Answer 1

There are income limitations to Roth IRA contributions based on a taxpayers adjusted gross income and filing-status. However, an income of $111,000 does not meet these limitations in 2024. Allowable contributions begin to be phased out for single taxpayers at an income of $146,000. The limit is even higher for married taxpayers.

A Roth IRA (individual retirement account) is individually controlled and not sponsored by an employer. If the company is offering matching contributions, this sounds more like an employer sponsored Roth 401(k). The Roth 401(k) does not have any income limitations, however, there still are maximum contribution limits.