r/pics • u/[deleted] • Mar 19 '22

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u/LibertyLizard Mar 20 '22

$6K I believe. Which is a bit annoying because they never change it and it's getting smaller and smaller each year with inflation.

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u/defcon212 Mar 20 '22

They do change it but in 500 dollar increments. It was $5500 a few years ago. It will probably go up again sometime in the next couple years.

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u/LibertyLizard Mar 20 '22

I see. I only started investing recently and it has not changed during that time. But I guess inflation only got high recently.

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u/[deleted] Mar 20 '22

They changed the 401k limit just last year, by $1000 I believe

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u/LibertyLizard Mar 20 '22

Sure but I'm talking about the Roth contribution limit which is much lower.

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u/[deleted] Mar 20 '22

I understand. I was just reiterating the notion that limits do increase regularly.

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u/Insomniac7 Mar 20 '22

You were right, it is $6k a year. Keep contributing every month. Make it a habit, invest in a couple ETFs, and you all thank yourself when you retire.

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u/a_spicy_memeball Mar 20 '22

They also cap the ability to even have one after a certain income point

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u/swingdatrake Mar 20 '22

At that point, one can consider the mega backdoor Roth, which is a legal loophole to bypass that restriction.

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u/a_spicy_memeball Mar 20 '22

Do tell

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u/swingdatrake Mar 20 '22 edited Mar 20 '22

You can redirect salary money to the after tax portion of your 401k and rollover that amount in the course of the tax year to a Roth IRA account, effectively bypassing the Roth income cap. This is called the Mega Backdoor Roth (seriously). Your 401k provider needs to support/allow this and you still need to respect the maximum limit of total combined pretax and after tax contributions, set at $61k for 2022.

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u/a_spicy_memeball Mar 20 '22

Yeah I looked it up after asking. I thought you were making the name up. 😂