What is the maximum allowable contribution to a traditional IRA for an individual?

What is the maximum allowable contribution to a traditional IRA for an individual?

• A. $5,000
• B. $6,000
• C. $7,000
• D. $10,000

Answer: (B)

The maximum allowable contribution to a traditional IRA for an individual is $6,000 for those under age 50. This limit is set to encourage retirement savings and is subject to periodic adjustments for inflation. For individuals aged 50 and over, there is a catch-up contribution provision that allows an additional $1,000, raising the total contribution limit to $7,000. This structure is designed to incentivize individuals to save more as they approach retirement age. While other amounts listed in the options may represent historical contribution limits or be relevant for specific situations, they do not reflect the current standard limit for most contributors. As a result, the answer of $6,000 accurately aligns with the IRS guidelines for traditional IRA contributions as of 2023.

The maximum allowable contribution to a traditional IRA for an individual is $6,000 for those under age 50. This limit is set to encourage retirement savings and is subject to periodic adjustments for inflation. For individuals aged 50 and over, there is a catch-up contribution provision that allows an additional $1,000, raising the total contribution limit to $7,000. This structure is designed to incentivize individuals to save more as they approach retirement age.

While other amounts listed in the options may represent historical contribution limits or be relevant for specific situations, they do not reflect the current standard limit for most contributors. As a result, the answer of $6,000 accurately aligns with the IRS guidelines for traditional IRA contributions as of 2023.