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IRAs

Who can contribute to an IRA, how much, the income rules that decide whether you can deduct a traditional contribution or make a Roth one, and the deadline for each year.

Lesson 5 of 11 · 5 min read · Intermediate · Members · Last reviewed October 2026

The short version

An IRA is a retirement account you open yourself at a bank, brokerage, mutual fund company, or insurance company. For 2026, you can contribute up to $7,500 in total across all your traditional and Roth IRAs, or $8,600 from age 50, but not more than your taxable compensation. A traditional contribution may be deductible, but the deduction phases out at certain incomes if you or your spouse are covered by a workplace plan. Roth IRA contributions phase out at higher incomes. Contributions for a year can be made until that year's tax-filing deadline, usually April 15 of the next year.

By the end of this lesson, you'll be able to

  • Explain who can contribute to an IRA and how the yearly limit works
  • Use the income ranges to tell whether a traditional contribution is deductible or a Roth contribution is allowed
  • State the deadline for IRA contributions and what happens if you contribute too much

Why this matters

An IRA is available whether or not your employer offers a plan. It can be your main retirement account, a second one alongside a 401(k), or the place old workplace accounts end up after a job change. Because you open it yourself, you also choose where it's held and what it invests in.

Opening one

You can open an IRA with a bank or other financial institution, a life insurance company, a mutual fund company, or a stockbroker.1 Like any retirement account, it's a container: once money arrives, you choose what to hold in it from what that provider offers. The two main kinds are a traditional IRA, where contributions may be tax-deductible, and a Roth IRA, where they aren't but qualified withdrawals may be tax-free.1

Who can contribute, and how much

  • You need taxable compensation, generally what you earn from working, and you can't contribute more than you earned that year.2
  • The 2026 limit is $7,500, or $8,600 if you're 50 or older, up from $7,000 in 2025.3
  • The limit covers all your IRAs together. Contributions to traditional and Roth IRAs count toward the same total.2
  • There's no age limit on contributing, for traditional or Roth IRAs.2
  • A spouse without earnings can still contribute if you file a joint return and the other spouse has enough compensation. Each spouse can contribute up to the limit.2

The rest of this lesson is for members

Still to come in this lesson: The income rules, The deadline, the key takeaways, and 2 quiz questions with explanations.

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Notes and sources

  1. Internal Revenue Service. Individual retirement arrangements (IRAs). Checked 2026-09-26. Back to text
  2. Internal Revenue Service. Retirement topics: IRA contribution limits. Checked 2026-10-06. Back to text
  3. Internal Revenue Service. 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500 (IR-2025-111, November 13, 2025). Checked 2026-10-06. Back to text
  4. Internal Revenue Service. Publication 590-A (2025), Contributions to Individual Retirement Arrangements (IRAs). Checked 2026-10-06.