Workplace Plans

• Employee contributions to a 401(k), 403(b), and SEP IRA are capped each year at 25 percent of an employee's income, up to a legal maximum that changes nearly every year. This amount may be found at any reliable tax website.
  
  

Traditional and Roth IRAs

• Contributions are limited by income and yearly defined caps.hand with us dollars image by Valentin Mosichev from Fotolia.com
  
  Individuals, with the exception of nonworking spouses, must earn at least the amount that they contribute to the plan. The contribution limit is the cap for total investments in both traditional and Roth IRA plans, forcing investors to decide how to allocate contributions between both plans.
  
  

Nonworking Spouse

• Nonworking spouses may be able to contribute to an IRA.money, money image by Valentin Mosichev from Fotolia.com
  
  If a working spouse earns enough to contribute, traditional and Roth IRA contributions may be made in a nonworking spouse's name. Contributions to both IRAs are permitted if the working spouse earns an amount equal to the contributions.
  
  

SIMPLE IRA

• Small businesses use SIMPLE IRA plans.business plan 2 image by Kelly Young from Fotolia.com
  
  Individual contributions are capped each year to a dollar amount and require individuals to earn at least the amount contributed.
  
  

Catch Up Contributions

• Individuals over age 50 are allowed larger contributionsgrowing older image by Pix by Marti from Fotolia.com
  
  Individuals over age 50 have special rules allowing them to contribute more money to 401(k), 403(b), IRA and SIMPLE IRA plans.
  
  

High Income

• Highly compensated employees have additional contribution caps.professional woman image by nutech21 from Fotolia.com
  
  High earners may not make Roth IRA contributions, and workplace contributions are limited to 25 percent of a capped taxable income amount. Highly compensated employee workplace plan contributions are limited if the total population of a workplace has a low contribution percentage.