What Are the IRA Contribution Age Limits?
Your eligibility to contribute to an IRA is determined by your earned income, not just your age. Learn the key rules that apply to savers at any life stage.
An Individual Retirement Arrangement (IRA) is a personal savings plan that offers tax advantages for setting aside money for retirement. The rules governing these accounts, including who can contribute and when, are determined by federal law and can change over time. Understanding the specific age-related requirements is an important part of using an IRA effectively.
Upper Age Limits for IRA Contributions
A significant rule change has altered the landscape for older individuals saving in a Traditional IRA. The Setting Every Community Up for Retirement Enhancement (SECURE) Act of 2019 repealed a restriction from Internal Revenue Code Sec. 219 that prohibited contributions for anyone who had reached age 70½. For the 2020 tax year and beyond, there is no longer an upper age limit for contributing to a Traditional IRA.
This legislative change aligns the rules for Traditional IRAs with those that have always governed Roth IRAs, which have never had a maximum age cap. The primary qualifier for making contributions to either a Traditional or Roth IRA at any age is the presence of earned income. This change acknowledges the reality of longer working lives, as many individuals now work past traditional retirement ages.
Minimum Age and Income Requirements
There is no statutory minimum age set by the IRS to contribute to an IRA. Instead, the determining factor is the earned income requirement, which means even a minor can contribute to an IRA if they have earned their own money.
The IRS defines earned income as taxable compensation from work, such as wages, salaries, tips, and net earnings from self-employment. This can include money a teenager earns from a W-2 job or from self-employment ventures like babysitting. Income from investments, allowances, or cash gifts does not qualify for making IRA contributions.
For a minor to contribute, the account must be set up as a custodial IRA. An adult, typically a parent or guardian, must open and manage the account for the minor until they reach the age of majority, which is generally 18. The amount a minor can contribute is limited to their total earned income for the year, up to the maximum annual contribution limit. For example, if a 16-year-old earns $3,000 from a summer job, their IRA contribution for that year cannot exceed $3,000.
Age-Based Catch-Up Contributions
Savers aged 50 and over are permitted to make an additional contribution on top of the standard annual limit. This extra amount is known as a “catch-up contribution” and is designed to help older workers bolster their retirement funds as they get closer to leaving the workforce. This provision applies to both Traditional and Roth IRAs.
For 2024 and 2025, the IRA catch-up contribution amount is $1,000. This means an individual aged 50 or older can contribute a total of $8,000 for the 2024 and 2025 tax years—the standard $7,000 limit plus the $1,000 catch-up amount.
To be eligible, the individual must turn 50 by the end of the calendar year for which the contribution is being made. The ability to make this additional contribution is not dependent on income levels, although the general rules for contributing to a Roth IRA, which include income limitations, still apply.