What Are the Roth IRA Income Limits for 2022?

When it comes to retirement savings accounts, a Roth IRA is definitely one you should consider having if you qualify for it.

“So long as they make income requirements, I don’t think there’s anyone who couldn’t benefit from this kind of account,” says Annelise Bretthauer, a Certified Financial Planner at Head to Toe Financial Planning. “It’s a highly tax-advantaged account, so the longer you have money in the stock market, the more money you have later—and the more potential you have for tax-free growth.”

Still, as with any retirement account, it’s important to understand the limitations you could face with a Roth IRA. Roth IRAs have both income and contribution limits, so not everyone can open one.

You have to meet certain income limits to be able to contribute to a Roth IRA. Those limits are based on your modified adjusted gross income (MAGI) as well as your filing status.[1, 2] For most people, their MAGI is adjusted gross income before student loan interest has been deducted.[3]

There was a bump-up in Roth IRA income limits from 2021—$4,000 higher for single filers and $6,000 higher for married couples filing jointly. That may not be a monumental boost, but every little bit can help.

Here are the 2022 income levels to for Roth IRA eligibility[2]:

Compared to a 401(k), which has an income limit of $305,000 in 2022, Roth IRAs have a much lower income threshold.[4]

If you don’t qualify for the full contribution because your income is higher than the limit, you may still be able to contribute a reduced amount.[2] Here are the 2022 income limits for reduced contributions:

Once you make more than these limits, you can’t directly contribute to a Roth IRA.[2] However, there is a backdoor Roth IRA option that can provide a workaround, says Heather Townsend, a Certified Public Accountant and owner of Townsend Financial. “What we do with the backdoor Roth is we take a traditional IRA, and if you don’t take the tax deduction, and then you convert it to Roth,” says Townsend. “Because you didn’t take the tax deduction, the conversion isn’t taxable.”

This works for high earners because traditional IRAs don’t have income limits, though you’d still be limited to the $6,000 to $7,000 annual contribution limit.[6]

There’s more to a backdoor Roth IRA, though. And these conversions can be complicated. If done incorrectly, it could backfire, Townsend adds. For example, you could be required to pay taxes on that conversion if you already have several IRAs. So it’s a good idea to consult an expert if a backdoor Roth IRA is of interest to you.

The amount you can contribute to a Roth IRA depends on your age as well as your income. Here are the 2022 contribution limits for those who qualify for the full amount[7]:

• Under 50: $6,000

• 50 or older: $7,000

Again, your income may disqualify you from making the full contribution. In that case, you’d use your MAGI to figure out what your reduced contribution limit would be.[2]

One thing you should know is that you can contribute to a Roth IRA even if you already have a 401(k).[7] And contributions to employer-sponsored plans don’t impact the Roth IRA contribution limits. “As long as you meet the income limitations for the Roth IRA, that $6,000 is entirely separate from your 401(k),” says Bretthauer.

However, Bretthauer notes that IRAs, traditional or Roth, require more legwork than a 401(k). “I have come across many clients who have been putting money in their [Roth IRA] and thinking it’s like their 401(k), but it’s really just sitting as cash,” she says.

One other point about IRAs: You could pay a penalty if you try to take money out of one early. “I’d recommend only putting money into an IRA—Roth or traditional—if you’re sure you don’t need to use it before age 59½,” says Bretthauer.

Here’s a recap of the different aspects of a Roth IRA to help you decide if it’s right for you.

Pros

• Qualified distributions are tax-free.[9]

• Can supplement a 401(k).[8]

• Provides a tax-advantaged retirement savings option if you can’t access employer-sponsored plans.

• Can contribute on your own schedule. That could be monthly, quarterly, once per year or at another cadence.

Cons

• Since it’s an individual retirement account, you wouldn’t get an employer match.

• Doesn’t reduce your taxable income while contributing.[9]

• Low contribution limits compared to employer-sponsored options.

• Income limits shut out those who make too much.

• There’s a penalty for taking money out before age 59½.[10]

• Takes more effort than employer plans since you have to open, fund and also invest a Roth IRA yourself.