Individual Retirement Accounts

Category	Traditional IRA	Roth IRA
Qualifications	Must have earned income. There are no age restrictions.	Must have earned income. There are no age restrictions.
Maximum Contributions	Taxable years beginning in 2026 and after — $7,500*	Taxable years beginning in 2026 and after — $7,500*
Catch-Up (50+)	2026 and after $1,100*	2026 and after $1,100*
Tax Status of Earnings	Tax-deferred until withdrawal	Not taxed. Earnings grow tax-free
Contribution Restrictions (based on adjusted gross income)	Yes, if active participant in employer retirement plan. Contribution phase-outs for 2026. Singles: $81,000 - $91,000. Married joint: $129,000 - $149,000	Contribution phase-outs for 2026. Singles: $153,000 - $168,000. Married joint: $242,000 - $252,000
Tax Deduction	Yes. Contributions up to the limit are fully tax deductible if you are not an active participant in a retirement plan. Otherwise, phase-out rules apply.	No. These are after-tax dollars.
Penalties for Early Withdrawal	None if: Over 59 1/2 Death or disability Qualified medical expense Health insurance premiums are paid while unemployed Qualified higher education expenses Qualified 1st time home purchase (up to $10,000) Due to IRS levy Qualified disaster-related expenses up to $22,000 Expenses from birth or adoption of a child (up to $5,000) Substantially equal periodic payments over life expectancy (annuity payments)	None if made after a 5-year period and: Over 59 1/2 Death or disability Qualified medical expense Certain health insurance Qualified 1st time home purchase (up to $10,000) Due to IRS levy Qualified disaster-related expenses Expenses from birth or adoption of a child (up to $5,000) Substantially equal periodic payments over life expectancy (annuity payments)
Required Distributions	Must be taken by April 1st of the year after the IRA owner turns 73 years old.	Only after death of participant

* To be adjusted annually for inflation in $500 increments

References

IRS Newsroom: 401(k) limit increases to $24,500 for 2026; IRA limit increases to $7,500

Four things to consider when using an IRA

Contribution deadlines: IRAs must be opened and/or funded by the April 15 tax-filing deadline to receive tax deductions.
Catch-up contributions: Individuals who have reached age 50 by the end of the year will be able to make additional catch-up contributions of $1,100 per year.
Required minimum distributions (RMDs): RMDs must be taken from a traditional IRA by April 1st of the year following the year the IRA owner turns 73 years old. For the first year, the owner can wait until April 1st, but for all subsequent years, the RMD must be taken by December 31st. For instance, if you turn 73 in 2026, your first RMD is due by April 1, 2027, but all subsequent RMDs must be taken by December 31 of each year. Roth IRAs do not require RMDs during the owner’s lifetime.
Saving at tax time: Have part of your federal-tax refund deposited directly into your IRA.

Remember

Retirement Savings Accounts invested in deposit accounts are insured up to $250,000 per account owner at FDIC-insured depository institutions.

Individual Retirement Accounts (IRAs)

References

Four things to consider when using an IRA

Remember

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