IRA Eligibility

Are You Eligible to Contribute to an IRA?

According to the Investment Company Institute, about 40% of U.S. households had any type of IRA.

Saving for a comfortable retirement is one of the most common financial goals among working people. One popular retirement savings vehicle is the IRA. Even if you have access to an employer-sponsored retirement plan, you may still be eligible to supplement your employer’s plan by contributing to a tax-deductible IRA or a Roth IRA. This calculator is designed to help you determine whether you qualify for the different types of IRAs and to estimate the potential future value of each type of IRA for which you are eligible.

You should choose “married filing separately� if you lived with your spouse at any time during the year or “single� if you did not live with your spouse at any time during the year.

 

Mandatory withdrawals (distributions) from traditional IRAs must begin by April 1 of the year following the year in which you turn age 70 ½.

 

Your Results

There are no mandatory withdrawal requirements for Roth IRA owners. Beneficiaries of either type of IRA are required to take mandatory distributions (based on their own life expectancies).

You can see below, and on the following pages, the types of IRAs you are eligible to make contributions to. If your income exceeds certain levels, you may qualify for a partial deduction (or no deduction) on your contribution to a traditional IRA, or you may be ineligible or only partially eligible for a Roth IRA. If that is the case, you can still consider making nondeductible contributions to a traditional IRA.

Are you eligible for a nondeductible IRA? 0.00
Your maximum annual contribution: $0.00
After-tax value of nondeductible IRA when withdrawals begin: $0
Estimated annual income from nondeductible IRA: $0.00

Your Results (continued)

Did you know that if you are aged 50 or older you may be able to make a catch-up contribution of $1,000 (maximum).

Are you eligible for a deductible IRA? 0.00
Your maximum annual contribution: $0.00
After-tax value of deductible IRA when withdrawals begin:   $0.00
Estimated annual income from deductible IRA: $0.00

Your Results (continued)

Are you eligible for a Roth IRA? 0.00
Your maximum annual contribution: $0.00
After-tax value of Roth IRA when withdrawals begin: $0.00
Estimated annual income from Roth IRA: $0.00

Are you eligible for more than one type of IRA account? If so, you may need to choose which account is appropriate for you. In some cases, you may have more than one type of IRA account. You should be aware that no matter how many different IRA accounts you have, your total contributions to all IRAs in a single year may not exceed $5,500. In addition, individuals aged 50 and older may make an additional $1,000 "catch-up" contribution, bringing the total contribution limit to $6,500. This calculator assumes maximum contributions, including "catch-up" contributions for those age 50 and older.

The chart below illustrates the differences in after-tax income for Roth, deductible, and nondeductible IRAs using the values you entered.

Estimated Total After-Tax Income from Different IRAs

 

The information provided is not specific investment advice, a guarantee of performance, or a recommendation. Rates of return will vary over time, particularly for long term investments. Investments offering the potential for higher rates of return also involve a higher degree of risk.

Note that withdrawals from deductible and nondeductible traditional IRAs are subject to ordinary income taxes and if withdrawn prior to age 59½ may be subject to an additional 10 percent federal income tax penalty (for nondeductible traditional IRAs, only the portion of the withdrawal attributable to earnings is taxable). To qualify for the tax-free and penalty-free withdrawal of earnings, a Roth IRA must be in place for at least five tax years and the distribution must take place after age 59½ or due to death, disability, or a first-time home purchase (up to a $10,000 lifetime limit). To the extent that they exceed total contributions, non-qualified distributions are subject to a 10 percent federal income tax penalty and are includable in gross income.