An Annual Contribution Limit is the maximum amount of money you’re allowed to put into a retirement account, like a traditional or Roth IRA, in a single year. This limit is set by the IRS and can change over time, so it’s important to stay up to date. The limit exists to make sure tax-advantaged retirement accounts are used fairly and primarily for long-term savings. While you can contribute up to this limit each year, you’re not required to. If you go over the limit, you might face taxes or penalties, so it’s important to track your contributions carefully. There are also special rules for people over a certain age that may let them contribute a little more, often called catch-up contributions.