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How much should I put into an IRA?

It's generally a good idea to put as much in an IRA as the government allows you to. That's because the more you save in a tax-favored account, the more tax-protected gains you can rack up.

If you're younger than 50, your 2012 contributions to a traditional IRA or a Roth IRA are limited to $5,000 or the total of your taxable compensation, whichever is smaller. If you're 50 or over before the end of the year, you're allowed to contribute up to an additional $1,000 for a total yearly contribution of $6,000; this is the IRS's way of encouraging you to save more in the final years before retirement.

However, the amount you can contribute to a Roth IRA also depends on your income. To make the full contribution, your modified adjusted gross income must be less than $125,000 if you're single, or $183,000 as a married couple filing jointly. If you earn slightly above those amounts, you may be able to make smaller contributions.

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