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only to Roth IRA accounts and if you had participated earlier in a 401 (k) plan where the employer went into bankruptcy then irrespective of your age, you can contribute $ 8000 or 'your taxable compensation for the year', whichever is lesser.

C. If you are contributing to both traditional IRAs (i.e.. IRAs other than Roth IRAs and the employer contribution under a SEP or SIMPLE IRA plan) and Roth IRAs, then the limit of your contribution to the Roth IRA plans will be reduced by the amount of contribution you have made to the traditional IRA plans.

D. If your Modified AGI is less than $ 159,000 if married filing jointly or qualifying widow(er); $0 or more if married filing separately and you lived with your spouse at any time
during the year; and $101,000 for all others, then the limit for your contribution to Roth IRA plan will be further reduced based on a complex formula. For such persons, calculating or computing your Modified AGI and the exact limit of your contribution to Roth IRA is somewhat complex. To make the task easier, IRS publishes work-sheets that can be very handy for doing this calculation. These worksheets can be seen at url: http://apps.irs.gov/pub/irs-pd f/p590.pdf which is a detailed guideline for contribution to IRAs.

In summary, this year the limits for contributions to Roth IRAs have been increased by $ 1000 for those eligible for it. Slight increase in modified AGI will allow some more people to take benefit of this tax benefit retirement saving scheme.

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