In 2003, for the first time in 20 years, the U.S. government raised the limits on how much can be contributed on a tax-deferred basis to an IRA. The maximum is $4,000 in 2007 and jumps to $5,000 in 2008. After 2008, increases will be indexed for inflation. These increases apply to both traditional and Roth IRAs.

An individual over the age of 50 can contribute even more to a retirement account to catch up for the years when he or she was not employed or did not contribute enough. Such contributions are over and above the increased limits on IRA contributions.

The three types of IRAs and the contribution limits for each are described in the informational links to the right.

NOTE: Please consult your tax professional regarding your specific needs.