Can I set up a traditional IRA?


Almost anyone can set up a traditional IRA. The only requirements are that you generally must have taxable compensation (typically, salary or wages from your job) and be under age 70½ in order to put money into an IRA. Beyond that, the basic mechanics of setting up an IRA are pretty straightforward. An IRA is typically established with a bank, insurance or investment company, or other financial institution with an initial investment of as little as $50. It's as simple as picking an institution, completing the required paperwork, and making an opening deposit. The only potentially difficult steps are selecting specific investment vehicles to fund your IRA and designating your beneficiary.

You can contribute a total of $6,000 to all the IRAs you own (traditional and Roth) in 2020 (increased from 2019). Married couples may contribute $6,000 per spouse under certain conditions, even if one spouse has little or no income. In addition, if you're age 50 or older, you can make an extra "catch-up" contribution of $1,000 in 2020. Your annual contribution can be made as a lump-sum payment or a series of payments, and can be made up until April 15 of the following year.

Although practically anyone with earned income who is under age 70½ can contribute the full $6,000 to an IRA in 2020, your ability to deduct contributions will depend on several factors (e.g., your adjusted gross income, your tax filing status, and whether you or your spouse is covered by an employer-sponsored plan). You may be able to deduct all, a portion, or none of your IRA contribution for a given tax year. You may even qualify for a partial tax credit.

Note that this discussion applies only to traditional IRAs. Roth IRAs are subject to special rules of their own.

Important Note: Equitable believes that education is a key step toward addressing your financial goals, and this discussion serves simply as an informational and educational resource.  It does not constitute investment advice, nor does it make a direct or indirect recommendation of any particular product or of the appropriateness of any particular investment-related option. Your unique needs, goals and circumstances require the individualized attention of your financial professional. Asset allocation and rebalancing do not guarantee a profit or protection against investment loss.

Information provided has been prepared from sources and data we believe to be accurate, but we make no representation as to its accuracy or completeness. Data and information is not intended for solicitation or trading purposes. Please consult your tax and legal advisors regarding your individual situation. Neither Equitable nor any of the data provided by Equitable or its content providers, such as Broadridge Investor Communication Solutions, Inc., shall be liable for any errors or delays in the content, or for the actions taken in reliance therein. By accessing the Equitable website, a user agrees to abide by the terms and conditions of the site including not redistributing the information found therein.

Please be advised that this materials is not intended as legal or tax advice. Accordingly, any tax information provided in this material is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer. The tax information was written to support the promotion or marketing of the transactions(s) or matter(s) addressed and you should seek advice based on your particular circumstances from an independent advisor.

Equitable Financial Life Insurance Company (NY, NY). Securities are offered through Equitable Advisors, LLC, NY, NY 212-314-4600 (member FINRA / SIPC). Equitable and Equitable Advisors are affiliated companies, do not provide legal or tax advice and are not affiliated with Broadridge Investor Communication Solutions, Inc.


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