IRA Eligibility

Which IRA is Right for Me?

Know Your IRA Eligibility

Before you can contribute to a Traditional IRA or a Roth IRA, you’ll first need to determine your eligibility. Although the contribution eligibility requirements differ, often the decision depends on your income.

Are you eligible for a Traditional IRA?
You must:

  • Have earned income
  • Be under age 70½

Key features:

  • Contributions may be tax-deductible
  • Earnings grow tax-deferred
  • Distributions generally are taxable
  • Distributions before age 59½ are subject to penalty tax, unless an exception applies
  • Required minimum distributions must begin at age 70½

Are you eligible for a Roth IRA?
You must:

  • Have earned income below or within the applicable MAGI limits

Key features:

  • Contributions are not tax-deductible
  • Contributions generally can be distributed tax-free at any time
  • Earnings grow tax-deferred
  • Earnings can be distributed tax-free if the first contribution was at least five years ago, AND you are 59½ or older, disabled, deceased or a first-time homebuyer
  • Distributions are not required until after the Roth IRA owner dies

We’ve put together this handy flow chart to help you understand your options:

IRA Flow Chart