What Are the Rules for Opening an IRA?

Dear Late,

Since the passage of the SECURE (Setting Every Community Up for Retirement Enhancement) Act in 2019, there’s no age limit for contributing to an IRA as long as you have earned income.

If you have no earned income from wages, salary or self-employment, you can’t contribute to an IRA. (Other income, like from Social Security benefits, another retirement account or spousal support, doesn’t count.)

Note that you’ll have to start taking required minimum distributions (RMDs) from a Traditional IRA when you turn 73 years old. RMDs, like the name suggests, are a minimum amount you have to withdraw from your IRA each year. The amount is calculated based on the balance of your account and your remaining life expectancy; you can figure it out using the IRS form 590-B (or work with a financial planner!).

RMDs don’t apply to a Roth IRA while you own it, but they come into play for anyone who inherits the account after you die.

The IRA contribution limit as of 2024 was $7,000, plus $1,000 in “catch-up contributions” if you’re over age 50. How much you can claim as a tax deduction is restricted depending on your (and, if you’re married, your spouse’s) income. Those income limits can change each year, but here are the numbers for 2024 (the most recent limits the IRS lists):

If you’re unmarried and earn:

• Up to $77,000, you can deduct the full amount.
• Up to $87,000, you get a partial deduction.
• More than $87,000, you get no deduction.

If you’re married or widowed and earn:

• Up to $123,000, you can deduct the full amount.
• Up to $143,000, you get a partial deduction.
• More than $143,000, you get no deduction.

Dana Miranda is a Certified Educator in Personal Finance® and author of YOU DON’T NEED A BUDGET. She writes Healthy Rich, a newsletter about how capitalism impacts the ways we think, teach and talk about money.