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2009 IRA contribution limit stays at $5,000

Beginning in 2009, IRA contribution limits are subject to cost of living adjustments, in $500 increments. While the IRS did not discuss the 2009 IRA limits on October 16 when it released other COLA adjusted limits in IR-2008-118, the IRS did update its website a few days later to include the following in its article on payroll deduction IRAs:

Contribution Limits: $4,000 in 2005-2007; and $5,000 for 2008 and 2009. A special “catch-up” contribution is permitted if the employee is aged 50 or over. This additional contribution is $1,000 per year for 2006 and beyond.

Because the $500 adjustment threshold was not met, the traditional and Roth IRA contribution limits remain at $5,000 for 2009.

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