You are probably in a situation that most average American executives have come to be in over the years, and you have a 401(k) retirement plan sitting dormant from a previous job that you held. It would be prudent for you to immediately open a IRA rollover account and transfer these funds before the old financial institution that was managing your account each alive with annual administrative fees. The Roth IRA restrictions are a little bit more liberal than the standard IRA account; you will need to stay within certain guidelines to achieve maximum benefit for your retirement plan.
The Internal Revenue Service has set forth guidelines that restrict your maximum amount of contributions to your IRA account annually. You can actually make too much money and not even be eligible to hold an IRA account. Typically the maximum contribution limit is set at five thousand dollars per year and individuals that are over the age of 50 1/2 years old can contribute quite a bit more by using the catch-up loophole that is in place. This may allow an individual to deposit up to eleven thousand dollars a year if they fall within the scope of those parameters. It will be entirely up to you, and not necessarily the payroll department for the company that you work for to keep track of any extra income that may be applied to your annual salary.
If you over contribute to your account even by accident there are still penalties that will be leveled by the IRS, and you will be solely responsible to pay those fines and or penalties. Not all companies have software that will be advanced enough to know how much your IRA can take in before it reaches its limit for the year. You will need to alert either the human resources department or the payroll manager about the upcoming bonuses or commission checks that could possibly put your retirement plan in jeopardy in this capacity.
Not only do you need to keep track of your income or AGI (Adjusted Gross Income), you will need to track your spouses as well. When your taxes are done each year, the maximum contributions are calculated by both of your incomes when you are filing jointly. Make sure that your husband or wife keeps you updated well in advance of any quarterly or annual bonuses that they may receive as well, so adjustments can be made to your Roth account.