Traditional IRA

How it works

For 2026, you can contribute up to $7,500, or $8,600 at age 50 or older. That cap is shared across all of your traditional and Roth IRAs, and total contributions can’t exceed your taxable compensation for the year (on a joint return, a spouse’s compensation can count). There is no age limit on contributing, and having a retirement plan at work doesn’t prevent you from funding a traditional IRA.

Whether a contribution is deductible depends on your filing status, your income, and whether you or your spouse is covered by a retirement plan at work. If neither you nor a spouse is covered, the full contribution is deductible. If either of you is covered, the deduction may be reduced or eliminated once your income passes certain IRS limits for that year, although the contribution itself is still allowed.

Taxes come later. Earnings inside the account aren’t taxed each year, and the taxable part of a withdrawal is added to your income for the year you take it. Because the account is meant for retirement, the IRS also sets rules for early withdrawals and for when withdrawals must begin, which are worth reading before relying on the money for another goal.

Related terms

Sources and further reading

• IRS: Traditional IRAs
• IRS: IRA contribution limits

Examples are illustrative and focus on U.S. personal finance. This page is educational, not individual financial, investment, tax, or legal advice. Read our editorial approach or report a correction.