Yes, you are correct. The 2026 limit for contributions to a Roth IRA are $7500, with a catch-up contribution of $1100 for those who are 50 years old or older. The contributions cannot be greater than your earned income for the year, which at $20,000 would be more than the maximum contribution.
You didn't mention other sources of income you may have for 2026, but bear in mind that your Modified Adjusted Gross Income (MAGI) for 2026 must be $242,000 or less in order to make the full contribution. The MAGI starts with your Adjusted Gross Income (AGI) and adds the following items to it to get MAGI:
- Student loan interest
- 1/2 of Self employment tax paid
- Deductible IRA contributions (not Roth)
- Foreign earned income exclusion and housing deduction
- Excluded savings bond interest
Above $242,000 MAGI, the full contribution amount is gradually phased out until MAGI reaches $252,000 at which point no Roth contribution is allowed.
