The maximum amount you can contribute to a Roth IRA for 2018 remains unchanged from 2017. However, the income limits to qualify for the maximum contribution to a Roth IRA are higher for 2018 than they were last year.
Kiplinger’s recent article on this topic asks “How Much Can You Contribute to a Roth IRA for 2018?” In its answer, the article explains that the maximum amount you can contribute to a Roth IRA for 2018 is $5,500, if you're younger than 50. Those age 50 and older can add an extra $1,000 per year in "catch-up" contributions. That is $6,500, which is the maximum contribution amount and the same as 2017.
The actual amount you can contribute to a Roth IRA is based on your income. To be eligible to contribute the maximum for 2018, your modified adjusted gross income (AGI) must be less than $120,000 if you’re single or $189,000 if you’re married and filing jointly. The contributions start to phase out above those amounts. You can't put any money into a Roth IRA once your income reaches $135,000 if single or $199,000, if married and filing jointly. Roth IRA income limits have increased slightly from 2017.
Unlike contributions to a traditional IRA—which may be tax-deductible—a Roth IRA has no up-front tax break. Money goes into the Roth after it’s been taxed. However, when you begin withdrawing funds in retirement, your contributions and all the earnings will be tax-free.
Roth’s are also more flexible than traditional, deductible IRAs. You can withdraw contributions to a Roth account anytime, tax- and penalty-free. However, if you want to withdraw earnings tax-free, you need to be at least age 59½ and must have owned the Roth for at least five years.
Roth’s aren’t subject to required minimum distributions (RMDs) after age 70½, and you can deposit money at any age, provided you have earned income from a job or self-employment. Traditional IRAs prohibit new contributions once you reach 70½, even if you’re working.
There’s no minimum age limit to open a Roth IRA, and you can contribute to another individual's Roth account as a gift. However, the recipients must have earned income, and you can only contribute an amount up to that person's annual earnings or $5,500, whichever is less.
Roth accounts are also a smart choice for those who want to leave money to their heirs. Heirs, other than a spouse, must take distributions from the IRA over time, but the money will be tax-free.
Reference: Kiplinger (April 22, 2018) “How Much Can You Contribute to a Roth IRA for 2018?”