A Roth IRA (Individual Retirement Account) or the 401K plan that many large and small businesses offer their employees is a sensible solution to help you save towards the time when you are going to retire. It doesn't take a lot to set up such an IRA and then make contributions towards it. However, you need to be aware of certain things with regards to making Roth IRA contributions and below we look at what these are.

First of all, throughout any financial year the amount you contribute to your Roth IRA is limited. Today an individual under the age of 50 can only contribute $4,000. If you are over 50 it is $4,500 or 100% of what your earned income is. Which one it is depends on which is the lesser amount. Also to contribute to IRA's there is no limit on the person's age.

However in order to make Roth IRA contributions your income should be taxable and if an individual is contributing to such an IRA their gross income should not exceed $110,000. For a couples, who file joint returns in any given year, the combined gross income limit is $160,000. However, if a couple chooses to file their returns separately, the gross income limit is $100,000.

You need to be aware that your Roth IRA contributions will be reduced when you are actually contributing towards a traditional IRA as well. So if you are making contributions to both a Roth and Traditional IRA these should not exceed the total amount of contributions you are allowed to make in any given year. But with Roth IRA's the contributions you make on these will be reduced if your income goes above a certain limit.

If you want to be able to contribute into a Roth IRA account as well as a traditional one then it is worth considering using the conversion method to do so. What you do is withdraw funds from your traditional IRA and as soon as they become available. You then have 60 days to place these funds into your Roth IRA.

You are not restricted to when you can make contributions to an IRA. But you must make sure that these contributions are made before you file your tax return even if you have been provided with an extension. Because IRA contributions are not tax deductible these should not be listed on a tax return.

As you can see from doing a little investigation just how important Roth IRA's can be to making your retirement a financially stable one. So when planning your retirement you need to consider just how important getting an IRA is to it.

In this article we have looked at matters relating to Roth IRA contributions which you need to be aware of. Discuss this matter with your financial adviser. They will be able to recommend one that they feel is suitable for you and which will not only be a sound financial investment but will ensure that your retirement is much happier.