Individual retirement account (IRA)

An individual retirement account (the tax code says "arrangement") is a US account that lets a person save for retirement with tax advantages, separate from any employer plan. It comes in two main forms. A traditional IRA may give a tax deduction now and taxes withdrawals later; a Roth IRA takes after-tax money and allows qualified withdrawals tax-free. Inside either one, dividends, interest and gains are not taxed year to year.

Rules for 2026

• Contribution limit: $7,500 across all your IRAs, plus a $1,100 catch-up if you are 50 or older, for $8,600 in total. You need earned income at least equal to the contribution (a spouse's income can count through a spousal IRA).
• Deadline: contributions for a tax year can generally be made until that year's filing deadline, usually mid-April of the following year.
• Roth income limit: the ability to contribute phases out between $153,000 and $168,000 of modified AGI for single filers and $242,000–$252,000 for married couples filing jointly.
• Traditional deduction: fully deductible unless you or your spouse is covered by a workplace plan and income is above IRS phase-out ranges.

Getting money out

Withdrawals before age 59½ generally owe a 10% additional tax on top of income tax, unless an exception applies. Traditional IRAs require minimum distributions starting at age 73 (75 for people born in 1960 or later); Roth IRAs have none during the owner's lifetime.

Related terms

• Roth IRA
• 401(k)
• Capital gain
• Target-date fund
• Retirement accounts explained: 401(k), IRA, Roth and 2026 limits
• Roth vs traditional IRA: how to compare tax now and tax later