IRS has contribution limit of $6000 ($7000 for 50+ individuals) for any given year for contribution to IRA account. Say in a given year, a person decides to convert $3000 from his/her traditional IRA to roth-IRA account. Does this converted amount of $3000 in any affect his/her ability to contribute an additional $6000 to IRA (traditional or roth) for that given year?


1 Answer 1


The limitations on contributions to IRA (Traditional or Roth) is only on money entering the retirement system.

Things that don't count as a contribution:

  • Transfer from investment A to investment B within an IRA.
  • Transfer from IRA type X at one manager to an IRA type X with a different manager.
  • Converting Traditional IRA to a Roth IRA.

Now the change from a Traditional IRA to a Roth IRA may involve taxes. Pulling money from a IRA type X to a non-retirement account may involve taxes and penalties. But these transactions can be done no matter how much income you have this year.

The tax law even allows you to convert money from a 401(k) to an IRA without impacting your ability to contribute money to a 401(k) or an IRA. Though again if you are changing flavor you may have tax issues.

If you have $1,000,000 in a Traditional IRA that has grown a ton in the decades, and you have a bucket of non-retirement money. You can convert the $1,000,000 to Roth, then pay the taxes on the growth, and still contribute $6,000 or $7,000 in new money to your IRA (either type), assuming you have enough taxable compensation that year.

  • You can contribute assuming you have compensation. Not all income is compensation. Especially for people with 'a bucket of non-retirement money'. Jun 9, 2021 at 3:23

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