Generally, you (or your spouse) must have earned income to contribute to an IRA. If you (or your spouse) earn taxable income and are under 70 and a half years old, you can contribute. The Security Act eliminated the age limit at which a person can contribute to an IRA. As long as you're still working, there's no age limit to be able to contribute to a traditional IRA.
With Roth IRAs, you can contribute at any age, as long as your earned income is within the allowable income limits. If you're not sure how much you can contribute, use our calculator. Anyone with earned income can open and contribute to an IRA, including those who have a 401 (k) account through an employer. The only limitation is on the total contributions to your retirement accounts in a single year.
Depending on the type of IRA you use, an IRA can lower your tax bill when you make contributions or when you withdraw money when you retire. You can contribute to a Roth IRA as long as you have eligible earned income, no matter how old you are. However, you can still contribute to a Roth IRA and make cumulative contributions to a Roth or traditional IRA, regardless of your age. There are annual income limits for deducting contributions to traditional IRAs and contributing to Roth IRAs, so there is a limit to the amount of taxes you can avoid investing in an IRA.
However, if you (or your spouse, if you are married) have a functioning retirement plan, such as a 401 (k) or 403 (b) plan, your modified adjusted gross income (MAGI) determines whether and to what extent your traditional IRA contributions can be deducted. It's possible to have a Roth IRA and a traditional IRA, or several IRAs at different institutions. You may or may not be able to request a deduction from your contributions to a traditional IRA depending on whether you or your spouse are covered by an employer-sponsored retirement plan, your tax-reporting status, and your modified adjusted gross income (MAGI). If you don't have a retirement plan at work, your traditional IRA contributions are fully deductible.
You can contribute to a traditional or Roth IRA even if you participate in another retirement plan through your employer or company. If you file a joint return, you may be able to contribute to an IRA even if you haven't had taxable compensation for as long as your spouse did. If your IRA is a traditional account instead of a Roth account, you'll also owe income taxes if you withdraw money early. This means that you contribute to a Roth IRA with the money deducted from taxes and you don't pay taxes on profits or investment withdrawals.