Why can you ONLY put 4K into an IRA per year?
Why is the limit so low? Did they want to distinguish IRAs from individual trading accounts? Or is the government afraid that everyone will be too rich when they retire if they upped the limit to lets say 10k per year?
Public Comments
- For the same reason that trusts are only allowed to be continued for a few generations - they would corner too much capital in the minds of the politicians.
- The government wants you to go out and spend right now instead of putting money away in savings/cds/iras instead they want you to spend spend to boost the economy. That is also why interest rates for CDs suck right now.
- Maybe because it would cut into tax revenues too much. But, starting in 2008 you can contribute $5000 and if you're over 50 add another $1000 to that.
- For 2008, the limit is $5k. Since I turn 50 this year, I can put in an extra $1k for "catch up" for a total of $6k. But, I agree that it is too small. Since the limit on a 401k account is $15.5k, it makes sense to me that an IRA should have the same limit for contributions, since they are both retirement accounts.
- Because armies cost money.
- In 2008, its $5K ($6K if age 50 or older). That is the law.
