I put too much money in my IRA, will there be a penalty ?

Question

I retired last year after I put the maximum amount in my Roth IRA, I paid taxes on it up front, will there be a penalty for depositing too much ?

Answer 1

If you put the maximum contribution into your Roth IRA, there won't be any penalty. Only If you put over the amount. If you are in the retirement age, hopefully in your case you are over 50, then you are able to put in extra $500 or $1000 due to the age of older pplx which is allow to do a catch up. Hopefully in your case that applies. Then it doesnt really matter in your case in regarding the penalty.

Fort those who are over 50 of age, you are able to contribute up to $5000 in opposed to those of us under 50 in 2006 of $4000.
In 2005 the catch up amount is $500
in 2006 the catch up amount is $1000

The only way you are going to be penalized is by withdraws from your Roth IRA before the age of 59 1/2. Other then that, there wont be any penalty.

Since you do not apply this ROTH IRA on your returns as you are filing your tax.

first link is on the catch up information.
2nd link is on the roth IRA penalty information.

Hope this clarified you confusion.

Answer 2

According to my CPA there is a penalty for depositing to much in any retirement account.I don't know how much it is but if they don't know about it they can't fine you.