Contributions to Individual Retirement Accounts (IRAs): Fact Sheet

Contributions to Individual Retirement Accounts (IRAs): Fact Sheet

Contributions to Individual Retirement
Accounts (IRAs): Fact Sheet
April 25, 2024
Congressional Research Service
https://crsreports.congress.gov
R48051

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Contributions to Individual Retirement Accounts (IRAs): Fact Sheet

Contents
Background ..................................................................................................................................... 1
Contributions to IRAs ..................................................................................................................... 2

Tables
Table 1. Contributions to Traditional IRAs ..................................................................................... 2
Table 2. Contributions to Roth IRAs ............................................................................................... 3

Contacts
Author Information .......................................................................................................................... 3

Contributions to Individual Retirement Accounts (IRAs): Fact Sheet

Background
Individuals can save for retirement in two types of tax-advantaged accounts: defined contribution
(DC) accounts and individual retirement accounts (IRAs).1 A DC plan is an employer-sponsored
retirement plan in which contributions from a worker, the employer, or both are placed in an
individual account. Individuals with wage income can also contribute to IRAs, which are
privately held retirement savings accounts. Contributions—and any investment earnings—in DC
accounts and IRAs can be used as a source of income in retirement. Both DC accounts and IRAs
may accept rollovers. Rollovers—transfers of funds from one retirement account to another—
preserve the tax advantages of retirement savings.2 This report provides Internal Revenue Service
(IRS) data on contributions to IRAs in 2020. Congress has an interest in contribution data because
tax expenditures for retirement plans (estimated to be $25.0 billion for IRAs and $117.8 billion
for DC plans in FY2024) are one of the largest categories of revenue losses attributable to
provisions in the tax code.3
The tax benefits of IRAs depend on whether the account is a traditional or a Roth account.4
Contributions to a traditional IRA may be tax deductible in the year in which they are made based
on income limits and depending on whether the account holder or spouse has a pension plan at his
or her work.5 Investment earnings in traditional IRAs accumulate on a tax-deferred basis.
Withdrawals from traditional IRAs (except for amounts attributed to non-deductible
contributions) are included in taxable income when received. Contributions to Roth IRAs are not
tax deductible in the year in which they are made. Investment earnings accumulate on a tax-free
basis. Qualified distributions from a Roth account (those taken by an individual who has held the
account for five years and made after death, on account of disability, or on or after attainment of
age 59½) are not included in taxable income.6
Individuals’ contributions to IRAs are subject to annual contribution limits. In 2020 (the most
recent year for which contribution data from the IRS is available), an individual could contribute
to his or her IRA up to the lesser of (1) his or her wage income for the year or (2) $6,000.7
Individuals age 50 and older could make additional $1,000 catch-up contributions to their IRAs.
The IRA contribution limit is adjusted annually for inflation. Beginning in tax year 2024, the
$1,000 IRA catch-up contribution is adjusted for inflation.8

1 For further information on DC plans, see IRS, “Definitions,” https://www.irs.gov/retirement-plans/plan-participant-
employee/definitions. For further information on IRAs, see CRS Report RL34397, Traditional and Roth Individual
Retirement Accounts (IRAs): A Primer.
2 IRS, “Rollovers of Retirement Plan and IRA Distributions,” https://www.irs.gov/retirement-plans/plan-participant-
employee/rollovers-of-retirement-plan-and-ira-distributions.
3 Department of the Treasury, Tax Expenditures, FY2024, https://home.treasury.gov/system/files/131/Tax-
Expenditures-FY2024-update.pdf.
4 For further information on the differences between traditional and Roth accounts, see IRS, “Topic no. 451, Individual
Retirement Arrangements (IRAs),” https://www.irs.gov/taxtopics/tc451.
5 IRS, “IRA Deduction Limits,” https://www.irs.gov/retirement-plans/ira-deduction-limits.
6 IRS, “About Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs),”
https://www.irs.gov/forms-pubs/about-publication-590-b.
7 IRS, “Retirement Topics—IRA Contribution Limits,” https://www.irs.gov/retirement-plans/plan-participant-
employee/retirement-topics-ira-contribution-limits.
8 IRS, “401(k) Limit Increases to $23,000 for 2024, IRA Limit Rises to $7,000,” November 1, 2023,
https://www.irs.gov/newsroom/401k-limit-increases-to-23000-for-2024-ira-limit-rises-to-7000.
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Contributions to IRAs
Table 1 provides data on contributions to traditional IRAs in 2020. Nearly 5 million taxpayers
contributed to traditional IRAs, with an average contribution of $4,461. About half of individuals
under age 50 (51.4%) and those age 50 to under 70½ (50.7%) who made contributions to their
traditional IRAs contributed the maximum amount ($6,000 for those under 50; $7,000 for those
50 and older in 2020).9 Nearly 5% of taxpayers age 50 to under 70½ made catch-up contributions
of less than the maximum $1,000 amount (not shown in Table 1).
Table 1. Contributions to Traditional IRAs
Tax Year 2020
Percentage of
Percentage of
Taxpayers
Contributors
Average
Age 50 and
Number of
Making the
Non-
Older Making
Contributing
Average
Maximum
Maximum
Any Catch-Up
Age Group
Taxpayers
Contribution
Contribution
Contribution
Contribution
All
4,961,960
$4,461
See note.
See note.
n/a

Under 35
694,818
$3,402
41.8%
$1,538
n/a
35 to under 50
1,594,588
$4,175
55.7%
$1,885
n/a
Under 50
2,289,406
$3,940
51.4%
$1,759
n/a

50 to under 65
2,108,306
$4,843
49.9%
$2,693
54.3%
65 to under 70½
562,853
$5,145
53.8%
$2,986
60.2%
50 to under 70½
2,671,159
$4,907
50.7%
$2,751
55.6%
Source: CRS analysis of Internal Revenue Service (IRS), “SOI Tax Stats—Accumulation and Distribution of
Individual Retirement Arrangements (IRA),” Table 5: Taxpayers with Traditional Individual Retirement
Arrangement (IRA) Contributions, by Size of Contribution and Age of Taxpayer, Tax Year 2020,
https://www.irs.gov/statistics/soi-tax-stats-accumulation-and-distribution-of-individual-retirement-arrangements.
Notes: In 2020 (the latest year for which data is available), there were 130.1 mil ion taxpayers with wage
income. In 2020, the IRA contribution limit for individuals was $6,000. Individuals age 50 and older could make
additional $1,000 catch-up contributions. Prior to 2020, individuals could not contribute to traditional IRAs in or
after the year in which they turned 70½. IRS data for tax year 2020 does not provide data on taxpayers over age
70½. Maximum contribution refers only to taxpayers who contribute the exact amount of the limit. The maximum
contribution for taxpayers whose earned income fell below the contribution limit is lower and was not captured
in this table. In addition, the contribution limit applies to all of an individual’s IRAs, so individuals who contributed
the maximum amount but split contributions between traditional and Roth IRAs are not recorded in the data as
having contributed the maximum amount.
Because those over 50 have a different maximum contribution than those under 50 and there is no age
information available for 1,395 taxpayers who contributed to traditional IRAs, CRS cannot determine the
percentage of all taxpayers making the maximum contribution or the average non-maximum contribution of all
taxpayers.
Table 2 provides data on contributions to Roth IRAs in 2020. Over 9 million taxpayers
contributed to Roth IRAs, with an average contribution of $3,581. Over one-third of taxpayers
under 50 (34.9%) and over 40% of taxpayers age 50 and older (41.4%) who contributed to Roth

9 The $7,000 limit includes $1,000 in catch-up contributions.
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IRAs in 2020 contributed the maximum amount ($6,000 for those under 50; $7,000 for those 50
and older in 2020).10 Between 5% and 6% of taxpayers age 50 and older made catch-up
contributions of less than the maximum $1,000 amount (not shown in Table 2).
Table 2. Contributions to Roth IRAs
Tax Year 2020
Percentage of
Percentage of
Taxpayers
Contributors
Age 50 and
Number of
Making the
Average Non-
Older Making
Contributing
Average
Maximum
Maximum
Any Catch-Up
Age Group
Taxpayers
Contribution
Contribution
Contribution
Contribution
All
9,210,723
$3,581
See note.
See note.
n/a

Under 35
3,233,379
$3,135
35.5%
$1,.556
n/a
35 to under 50
2,867,054
$3,200
34.2%
$1,748
n/a
Under 50
6,100,433
$3,166
34.9%
$1,647
n/a

50 to under 65
2,516,457
$4,316
40.1%
$2,517
45.9%
65 and older
588,816
$4,736
46.7%
$2,756
52.0%
50 and older
3,105,273
$4,396
41.4%
$2,558
47.0%
Source: CRS analysis of Internal Revenue Service (IRS), “SOI Tax Stats—Accumulation and Distribution of
Individual Retirement Arrangements (IRA),” Table 6: Taxpayers with Roth Individual Retirement Arrangement
(IRA) Contributions, by Size of Contribution and Age of Taxpayer, Tax Year 2020, https://www.irs.gov/statistics/
soi-tax-stats-accumulation-and-distribution-of-individual-retirement-arrangements.
Notes: In 2020 (the latest year for which data is available), there were 130.1 mil ion taxpayers with wage
income. In 2020, the IRA contribution limit for individuals was $6,000. Individuals age 50 and older could make
additional $1,000 catch-up contributions. Maximum contribution refers only to taxpayers who contribute the
exact amount of the limit. The maximum contribution for taxpayers whose earned income fell below the
contribution limit is lower and was not captured in this table. In addition, the contribution limit applies to all of
an individual’s IRAs, so individuals who contributed the maximum amount but split contributions between
traditional and Roth IRAs are not recorded in the data as having contributed the maximum amount.
Because those over 50 have a different maximum contribution than those under 50 and there is no age
information available for 5,017 taxpayers who contributed to Roth IRAs, CRS cannot determine the percentage
of all taxpayers making the maximum contribution or the average non-maximum contribution of all taxpayers.

Author Information

Elizabeth A. Myers
John J. Topoleski
Analyst in Income Security
Specialist in Income Security

10 The $7,000 limit includes $1,000 in catch-up contributions.
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Contributions to Individual Retirement Accounts (IRAs): Fact Sheet

Acknowledgments
Sylvia Bryan assisted in updating this report.

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