contribution limit
The maximum dollar amount the government allows you to put into a certain account in a given year.
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Words beside it
- Catch up contribution
Extra you may put into retirement accounts once you reach 50.
- contribution
The money you actually put into an account like an IRA in a given year. The government sets a maximum dollar amount you are allowed to add each year.
- Contribution margin
Price minus variable cost per unit. What each sale contributes toward fixed costs and profit.
- direct contribution
A direct contribution is when you put money straight into an account without any extra steps in between. For example, putting money right into a Roth IRA without converting it from another account first.
- Income limit
An income limit is a rule that says once you earn above a certain amount of money per year you are no longer allowed to do a specific financial action, like contributing directly to a Roth IRA.
- Limit order
An order that executes only at a specified price or better. The price is certain, the fill is not.
- nondeductible contribution
A nondeductible contribution is money you put into a traditional IRA but cannot subtract from your taxable income that year. You still pay normal income tax on it upfront, which matters later when you convert it.
- pretax contribution
Money you put into an account before the government counts it as income, which lowers the amount of your paycheck that gets taxed right away.
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