1987 RULE ABOUT LIMITING CONTRIBUTIONS
I RECALL THERE WAS A RULE I BELIEVE IN 1987 WHERE THERE WAS A LIMIT ON YOUR ABILITY TO CONTRIBUTE TO AN
IRA DEFINED BY HOW MUCH YOU HAD ALREADY CONTRIBUTED. I BELIEVE THERE WAS A GRANDFATHER CLAUSE RELATED TO THIS AND
I WAS RESTRICTED BECAUSE OF MY DATE OF BIRTH WHICH IS APRIL 26. 1937.
AM I CORRECT REGARDING THIS RULE?
IF NOT IS THE DATE DIFFERENT?
IF SO. WHAT WERE THE LIMITS IN 1987 AND WHERE CAN I FIND DOCUMENTATION OF THAT RULE?
THANY SO MUCH.
SINCERELY,
ALAN LIFSHAY
Permalink Submitted by Alan Spross on Tue, 2012-04-24 20:26
In 1987, Congress established income limits in order for the contribution to be deductible if you were covered by a plan at work. It did not limit contributions, only the deduction of those contributions. These deduction limits were not age based.
You can contribute to a traditional IRA if you have earned income at least equal to your contribution and you did not reach age 70.5 for the contribution year. You can no longer contribute to a traditional IRA now, but if you are still working you can contribute to a Roth IRA. Roth contributions cannot be deducted.
Here is an article including the history of IRAs:
http://www.ici.org/pdf/per11-01.pdf