Anyone with earned income can contribute to a Traditional IRA. You may not contribute to a Traditional IRA for the year you reach age 70½ and after. Contributions to a Traditional IRA may be tax-deductible, depending on three things:
- Your coverage by an employer-sponsored retirement plan
- Your Modified Adjusted Gross Income (MAGI)
- Your tax filing status
You cannot begin withdrawing money from a Traditional IRA until you reach age 59½ without incurring a 10 percent tax penalty. However, some distributions are not subject to this penalty, such as:
- Death or disability of the account owner
- Qualified higher education expenses
- Qualified first-time home buyer's expenses
- Certain medical expenses
- Substantially equal periodic payments
Distributions from a Traditional IRA must begin by April 1 of the year after you reach age 70½ and continue each year as a required minimum distribution (RMD).
Use our calculator to compare whether a Traditional IRA or Roth IRA gives you any advantage.
Traditional IRA Contribution Limits
The following chart summarizes contribution and catch-up limits for Traditional IRAs.
|Year||Limit if under age 50||Limit for age 50+|
Deadlines: You can contribute to your IRA from January 1 until your tax filing deadline for that year, excluding extensions (usually this is April 15).
Is It Deductible?
If you are not covered by an employer-sponsored retirement plan, you can make a fully deductible Traditional IRA contribution up to the annual limit, provided your MAGI is less than the allowed maximum. If married, your spouse may also contribute to his/her own IRA.
If you are covered by an employer-sponsored retirement plan, your MAGI determines how much of your contribution may be deductible.
|Filing Status||2017 MAGI||Is It Deductible?|
|Single or Head of Household||$62,000 or less||Fully deductible|
|More than $62,000 but less than $72,000||Partially deductible|
|$72,000 or more||Not deductible|
|Married Filing Jointly and Qualifying Widow(er)||$99,000 or less||Fully deductible|
|More than $99,000 but less than $119,000||Partially deductible|
|$119,000 or more||Not deductible|
A working or non-working spouse who is not covered by an employer-sponsored plan may have a fully deductible IRA if joint MAGI is less than $186,000 for 2017, or a partially deductible IRA if joint MAGI is less than $196,000 for 2017. For any year that a spousal IRA contribution is made, federal income tax return must be filed jointly.
Western & Southern Life does not provide tax or legal advice. Please contact your tax or legal advisor regarding your situation.
*Contribution rates per Internal Revenue Service at www.IRS.gov.