Terms of Use 


What Is a Traditional IRA?

A Traditional IRA (Individual Retirement Account) is a tax-advantaged retirement savings account that lets you save money for retirement with tax-deferred growth. That means your investment earnings aren’t taxed as long as they remain in the account — you pay taxes when you withdraw funds in retirement.

You can hold cash, stocks, bonds, mutual funds, ETFs, CDs, and other investments inside a Traditional IRA. The tax treatment of your contributions — whether they are tax deductible — depends on your income and whether you (or your spouse) are covered by a workplace retirement plan.

Traditional IRA Snapshot (2026)

  • Contributions: May be fully or partially tax-deductible, depending on income and workplace retirement plan coverage.

  • Earnings: Grow tax-deferred until withdrawal.

  • Withdrawals: Generally subject to income tax; a 10% early withdrawal penalty may apply before age 59½ unless an exception applies (e.g., first-home purchase, certain education expenses).

  • Required Minimum Distributions (RMDs): Begin at age 73 (for 2026 and later).

Who Can Contribute to a Traditional IRA?

To contribute to a Traditional IRA in 2026, you must have “earned income” — such as wages, salary, tips, bonuses, or self-employment income. Deferred compensation, interest, dividends, and rental income don’t count as earned income.

There is no age limit for contributions — you can continue contributing as long as you have earned income, thanks to changes under the SECURE Act.

A non-working spouse can also contribute to a spousal IRA if the working spouse has sufficient earned income.

2026 Traditional IRA Contribution Limits

For tax year 2026:

  • You can contribute up to $7,500 (or 100% of your earned income, if less).

  • If you are age 50 or older, you can make an additional catch-up contribution of $1,100, for a total of up to $8,600.

  • These limits apply across all your IRAs combined (Traditional + Roth).

You have until the tax-filing deadline (usually April 15, 2027) to make contributions for the 2026 tax year.

Deducting Your Traditional IRA Contributions

Anyone with earned income can contribute to a Traditional IRA, but whether you can deduct that contribution on your tax return depends on your income and workplace retirement plan status:

1. Neither Spouse Covered by a Workplace Plan

If you and your spouse are not covered by a retirement plan at work (e.g., 401(k)), you can fully deduct your Traditional IRA contribution up to the annual limit — regardless of your income.

2. You Are Covered by a Workplace Retirement Plan

If you are covered by a retirement plan at work, the Traditional IRA deduction is phased out based on your modified adjusted gross income (MAGI):

For 2026:

  • Single or Head of Household: Full deduction if MAGI ≤ $81,000; partial deduction if between $81,000 and $91,000; no deduction at MAGI ≥ $91,000.

  • Married Filing Jointly (contributor covered): Full deduction if MAGI ≤ $129,000; partial deduction if between $129,000 and $149,000; no deduction at MAGI ≥ $149,000.

  • Married Filing Separately (covered): Partial deduction if MAGI is less than $10,000; no deduction at $10,000 or more.

3. You’re Not Covered but Your Spouse Is

If you are not covered by a workplace plan but your spouse is, you can still deduct your full contribution if your joint MAGI is below a higher threshold — in 2026, the phase-out range is $242,000 to $252,000 for married filing jointly.

Key Notes

  • Contribution Limits Are Combined: You cannot exceed the annual limit by contributing to multiple IRA accounts.

  • Earned Income Requirement: Your total IRA contribution cannot exceed your earned income for the year.

  • Roth IRA Rules Differ: The ability to contribute to a Roth IRA — and the income limits for Roth contributions — are separate from Traditional IRA deductibility rules.