To make a regular Traditional IRA contribution, the IRA owner must have eligible compensation (generally earned income) equal to or greater than the Traditional IRA contribution amount.

An IRA owner may contribute up to the lesser of

• 100 percent of earned income, or
• $7,500 for 2026 (plus catch-up contributions, if eligible).

If you are age 50 or older, the maximum contribution limit for the year is increased by $1,000, which is referred to as a “catch-up” contribution, for a total maximum IRA contribution of $8,600 for 2026. The catch-up contribution limit is also subject to potential annual cost-of-living-adjustments beginning in 2027.
Although you may contribute to multiple IRAs, your total contribution amount cannot exceed the annual contribution limit.

Spousal contributions are a way to make regular contributions to IRAs. An IRA owner who has little or no income can make a regular contribution based on the other spouse's income if the following requirements are met:

1. The couple must be married and file a joint federal income tax return.
2. One spouse must have compensation or earned income equal to or greater than the IRA contribution.
3. The noncompensated spouse must establish an IRA.

The amount an individual may contribute per taxable year as a spousal contribution is the same as that for regular IRA contributions ($7,500 for 2026, plus catch-up contributions, if eligible).

A simplified employee pension (SEP) plan is a retirement plan that allows employers to contribute to employees’ Traditional IRAs. SEP plan contributions are subject to different contribution limits than Traditional IRA contributions. Once an employer makes a SEP plan contribution to an IRA, all the general Traditional IRA rules and regulations apply. SEP plan contributions do not affect the individual's ability to make Traditional IRA contributions. The following characteristics apply to SEP plan contributions:

• The maximum SEP plan contribution is the lesser of 25 percent of compensation up to $72,000 for 2026.
• SEP contributions are always 100 percent vested.
• Eligible participants, regardless of age, may receive SEP plan contributions.
• Participants receiving SEP contributions also may make regular contributions and, if eligible, catch-up contributions to their Traditional IRAs.

NOTE: Under the SECURE 2.0 Act of 2022, employers may allow employees to treat SEP contributions as Roth contributions. Although this option is available beginning in 2023, more guidance is needed before employers may offer a Roth contribution option.

Individuals must make regular contributions to Traditional and Roth IRAs by the due date of their federal income tax returns (generally April 15), not including extensions. For example, you can make your 2026 tax year contribution anytime between January 1, 2026, and April 15, 2027.

Yes. Traditional IRA owners are permitted to make nondeductible IRA contributions if they are not eligible for a tax deduction or if they choose to not take a deduction. The combined total of deductible and nondeductible contributions cannot exceed the annual contribution limit of $7,500 for 2026, plus catch-up contributions if eligible, or 100 percent of earned income, whichever is less. IRA owners track their nondeductible IRA contributions by filing Form 8606, Nondeductible IRAs, with their federal income tax returns.

IRA owners may wish to move their IRAs from one financial organization to another. Transfers and rollovers are two methods of moving assets from one IRA to another IRA of the same type.

A transfer is a direct movement of assets between like IRAs. A transfer generally is from one financial organization to another financial organization, but may occur between IRAs at the same financial organization. Although IRA owners direct the asset transfer, they do not have actual receipt of the assets. An IRA owner may make an unlimited number of transfers in a year. The transfers may be for all or any part of an IRA balance. Transfers are not reported to the IRS.

An IRA-to-IRA rollover is another method of moving assets, tax-free from one IRA to another IRA of the same type. With rollovers, the IRA owner, surviving spouse beneficiary, or former spouse receives the assets through a distribution before rolling it over to another IRA. A distribution that is eventually rolled over to an IRA is treated like any other type of distribution at the time it is taken from the IRA. Consequently, the withholding rules apply. The distributing financial organization reports the IRA distribution on Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., and the receiving financial organization reports the rollover contribution on Form 5498, IRA Contribution Information.

Contributions made by an employer through a retirement plan known as a simplified employee pension (SEP) plan are contributed to Traditional IRAs. Once SEP plan assets are in the Traditional IRA, all the general Traditional IRA rules and regulations apply. They do not, however, affect an IRA owner’s ability to make regular Traditional IRA contributions. But participating in the SEP plan makes an individual an active participant for purposes of Traditional IRA deductions.

Traditional IRAs also may receive rollovers of pretax and after-tax assets from employer-sponsored retirement plans, which include 401(a) and 403(a) qualified retirement plans (QRPs), 403(b) plans, governmental 457(b) plans, the federal Thrift Savings Plan, and SIMPLE IRA plans (after two years of participation in the SIMPLE IRA).

Recharacterized assets also may be contributed to a Traditional IRA.

Unlike many employer-sponsored retirement plans in which access to assets might be limited until the participant has a change of employment or reaches retirement age, access to IRA assets is guaranteed, always. Most Traditional IRA distributions taken before the IRA owner reaches age 59½ are subject to a 10 percent early distribution penalty tax. This is to discourage people from taking Traditional IRA distributions at an early age rather than keeping the assets for retirement. The 10 percent early distribution penalty tax does not apply in the following situations.

• Age 59½
• Qualified birth or adoption expenses
• Death
• Disability
• Medical expenses that exceed 7.5% of adjusted gross income
• Health insurance premiums following unemployment
• First-time home buyer expenses
• Higher education expenses
• IRS levy
• Series of substantially equal periodic payments
• Qualified reservist distributions
• Qualified disaster recovery distributions
• Terminal illness
• Domestic abuse (starting in 2024)
• Emergency expenses (starting in 2024)

IRS Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs), provides more detail on these penalty tax exceptions.

When IRAs were created, they were intended to encourage tax-deferred savings for retirement. IRA owners, however, cannot use IRAs to permanently shelter assets from income tax. For this reason, a minimum amount must be distributed from your IRA each year once you reach a certain age called the required minimum distribution (RMD) age.

The RMD age was increased from age 70½ to age 73. The RMD age will remain 73 and will increase to age 75 in 2033.

Generally, you must begin taking RMDs from a Traditional IRA by April 1 of the year following the year you attain your RMD age. This date is often referred to as your “required beginning date,” or RBD. After this date, you must continue to satisfy your RMD going forward by December 31 of each year.

If you fail to take your RMD, you will be subject to a 25 percent excess accumulation penalty tax on the amount that should have been distributed but was not. If a failure to take your RMD is corrected in a timely manner, the penalty tax on the failure is further reduced from 25 percent to 10 percent.

Imagine for a moment that an individual has just received a check. She looks at her summary and notices that federal income taxes were not withheld. Her initial reaction is that something is wrong—it's not—if this check is from her Roth IRA.

Two factors make this possible.

• First, the money an individual contributes to a Roth IRA has already been taxed (individuals cannot take a tax deduction for their Roth IRA contributions). So the principal amount is never subject to future taxes or penalties as long as individuals stay within the contribution guidelines.
• Second, the Roth IRA allows contributions to grow tax-deferred. If an individual does not distribute any of the earnings until he has had the Roth IRA for at least five years and has a qualifying event (age 59½, death, disability, or a first-time home buyer), those tax-deferred earnings are tax-free.

To make a regular Roth IRA contribution, the IRA owner only needs to have eligible compensation equal to or greater than the Roth IRA contribution amount.

The annual regular contribution limit is the lesser of $7,500 or 100 percent of eligible compensation (generally earned income). IRA owners age 50 or older by the end of the tax year may make an additional $1,100 contribution to help "catch-up" on their retirement savings, for a maximum contribution of $8,600.

The contribution limit applies to all Traditional and Roth IRA contributions made for the year, in aggregate.

Please consult with your tax professional as to the amount that an individual is eligible to contribute.

Individuals must make regular contributions to Traditional and Roth IRAs by the due date of their federal income tax returns (generally April 15), not including extensions. For example, you can make your 2026 tax year contribution anytime between January 1, 2026, and April 15, 2027.

Individuals may take a qualified Roth IRA distribution tax- and penalty-free. A Roth IRA distribution is considered a qualified distribution if two requirements are met. First, the Roth IRA owner must satisfy a five-year waiting period. This period begins on the first day of the year for which the Roth IRA owner makes a regular contribution or, if earlier, in which the Roth IRA owner completes a conversion or retirement plan rollover. Second, the distribution must be made because of one of the following events.

• Age 59½
• Death
• Disability
• First-time home buyer

While individuals may take distributions from their Roth IRAs at any time, distributions that are not qualified distributions may be subject to taxes (and in some cases the 10 percent early distribution penalty tax).

Yes. An individual may convert assets from a Traditional IRA to a Roth IRA. The individual must pay tax on any previously untaxed dollars converted from, but the 10 percent early distribution penalty tax does not apply to the conversion amount. Individuals should seek advice from a competent tax advisor to determine whether converting pretax retirement assets is beneficial.

Unlike Traditional IRAs, there are no required minimum distributions due upon attaining RMD age. Earnings can continue to grow tax-deferred until the Roth IRA owner takes a distribution. There may be special distribution requirements, however, after the IRA owner dies.