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At CalTier, we are experiencing tremendous growth with investors joining our CalTier Multifamily Fund. We are even more excited that a significant sector of these investors are taking advantage of investing in a tax-efficient manner with our CalTier “No Fee” IRA.*

We have received many questions on how to fund an IRA, and what are the annual contribution limits. Today, we will discuss the contribution limits for both 2021 and 2022; the good news is that you can still make a 2021 contribution up until April 15, 2022.

Traditional IRAs

A traditional IRA allows you to deduct your contribution from your income, which can reduce your taxes and make it easier to save. For example, suppose you’re in the 24 percent federal income tax bracket. In order to save $7,000 for retirement in a fully taxable account, you would have to earn about $9,211 before taxes. With a traditional IRA, however, you can deduct that $7,000 contribution, meaning that to get $7,000 to invest, you only have to earn $7,000. (You can only contribute earned income to an IRA; investment income and Social Security benefits don’t count.)

If you (or your spouse) don’t have a retirement plan of any kind, you can take the full deduction for an IRA. If you do have a retirement plan available from your employer — even if you don’t take advantage of it — your ability to deduct a traditional IRA contribution is limited by your modified adjusted gross income (MAGI), which is your adjusted gross income on your 1040 or 1040-SR tax form, minus certain deductions, such as student loan interest.

Traditional IRAs — 2021 vs. 2022 deduction limits

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You can’t avoid paying taxes on your traditional IRA contributions, as well as any gains, forever. When you start taking withdrawals after age 59 1/2, your withdrawals are taxed at your regular tax rate. For example, if you are in the 24 percent tax bracket and you take out $7,000, you’ll get $5,320 after federal income taxes. In addition, you must take required minimum distributions (RMDs) from your IRA after age 72, based on IRS life expectancy tables.

If you take a withdrawal from your traditional IRA before age 59 1/2, you’ll have to pay an additional 10 percent penalty on the entire amount you withdraw. If you are 58 years old and take $7,000 from your IRA, for example, you’ll owe a $700 tax penalty in addition to any federal and state income taxes on the entire amount you withdraw.

Roth IRAs

Contributions to a Roth IRA aren’t deductible, but you pay no tax when you withdraw your contributions at any age. And if you make a qualified withdrawal after you hit age 59 1/2, you pay no tax on your earnings, either. (Also, you must have started your Roth IRA account at

least five years before taking withdrawals from your earnings.) There are no RMDs for Roth IRAs.

There’s one catch: Your ability to make contributions to a Roth IRA are limited by your federal income tax filing status and your MAGI.

The table below shows the income limits for 2022 for making Roth contributions. As with traditional IRA contribution limits, the Roth income limits are adjusted for inflation each year.



James Jones

Please visit for more information.

CalTier does not provide tax advice. Please consult your tax expert before making any decisions.

*The partnership benefits between CalTier and AltoIRA are based on the ‘Pro’ account terms. The following fees apply:

Account opening fee: $250
Partner Investment fee: $10

You will be charged the account opening fee by Alto of $250 when setting up your account. CalTier will reimburse the account fee to AltoIRA at least 60 days after a new account opening so long as you invest a minimum of $5,000 into the CalTier Fund 1, LP offering. If your new account meets the minimum investment requirements, Alto will reimburse the account opening fee to you. Additionally, if you maintain a minimum of $5,000 per year in the CalTier Fund 1, LP offering then CalTier will continue to cover the $250 yearly account fee at no cost to you

CalTier will also cover the $10 investment fee for CalTier Fund 1, LP investments. CalTier will not cover any other fee such as wire, account closure or investments into non CalTier offerings. You are free however to make as many of those as you wish.

The Pro Account offers optional features with additional fees which CalTier will not be covering:

Outbound wire fee: $25 (if needed for non-CalTier offerings)
Account closure: $50

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