why is there a contribution limit on IRAs?
If there were no contribution limits on IRA’s, everybody would try to put as much as possible into the plan to reduce their current tax liability. If everyone reduced their current tax liability, the government would lose substantial current tax revenue. The government, would of course, get the tax revenue back in the future, but they need both. Revenue now and in the future. There are a number of different qualified retirement plans available today. Here is a list of the contribution limits for each of these plans. http://www.themoneyalert.com/Retirement-Plan-Limits.html The IRS is really not going to come out and say they are limiting contributions because they need revenue. They will state it in such a way as to make it look like a great way for you to save for retirement. Here is some of the information directly from the IRS website.
