Individual Retirement Account contributions are limited to an annual amount specified in the Internal Revenue Code. The IRS revises the contribution limits regularly. In addition, the Internal Revenue Code provides for additional amounts, termed "catch-up contributions" for account holders who are 50 or older. What is important to remember is that whether you hold one account or four, the sum of your contributions cannot exceed that limit.
IRAs are intended to benefit wage and salary earners. Contributions must come from earned income. Consequently, your annual contribution cannot exceed your taxable income for that year. For IRA purposes, taxable income includes commissions and alimony. In addition, combat pay, which is not taxable, may be contributed to your IRA.
As of tax year 2010, the annual IRA contribution limit is $5,000 for people under 50. If you have more than one IRA, whether individual or Roth, your total contributions cannot exceed this limit. For example, if you put $2,800 into one IRA in 2010, you can only put $2,200 in your other account that year.
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To encourage retirement saving among older workers, the IRS allows wage earners 50 and older to contribute an addition $1,000 per year total to their accounts as of 2010. So, a 58-year-old with two IRAs can contribute $3,800 to one IRA and $2,200 to another.
Age 70-1/2 Rule
Once you reach the age of 70-1/2, you can no longer make contributions to a traditional IRA. You can feel free to contribute to your Roth IRA, however, until the end of your life.