Understanding IRA Contributions
By Jodie Norquist, CIP, CHSP
Financial organizations field a lot of IRA questions from clients, and many of the same ones seem to come up repeatedly. Here are some common IRA contribution questions you’re likely hearing at your branch office, over the phone, or in your inbox.
I have a 16-year-old client who works part-time at a grocery store. Can he open an IRA and start contributing?
Yes. There’s no minimum age for IRA contributions, but the individual must have eligible compensation, typically income from a job. A minor may need a parent or guardian to open a custodial IRA, depending on state law, but the contribution rules are the same as for adults. If the teen earned $3,500 bagging groceries, he can contribute up to $3,500 to a Traditional or Roth IRA.
I have a 74-year-old client who is mostly retired but works part time. She is also taking required minimum distributions (RMDs). Can she continue to contribute to her Traditional IRA?
Absolutely. Before 2020, clients had to stop contributing to IRAs once they turned 70½. That rule was eliminated.
Today, anyone of any age with eligible compensation may contribute to a Traditional IRA. There’s also no age restriction on Roth IRA contributions, although income limits still apply.
If your client is still working and earning income, she can keep contributing to her IRA. But when IRA owners reach their required beginning date (RBD), which is now age 73, they do need to take required minimum distributions each year.
My client turns 50 on May 18, 2026. When can she make her IRA catch-up contribution?
She can make her catch-up contribution to her IRA as soon as January 1, 2026, or the year in which she will turn 50. An IRA owner doesn’t need to wait until she actually turns 50 to be able to make a catch-up contribution. For 2025, the catch-up contribution is $1,000 and increases to $1,100 for 2026.
My clients are married; one is working full time and the other is not employed. Can the nonworking spouse contribute to an IRA if she doesn’t have eligible compensation?
Yes. This is a classic spousal IRA contribution situation. Each spouse can make a full IRA contribution as long as
the couple is married,
they file a joint federal tax return, and
the working spouse has enough eligible compensation.
For example, a working spouse earning $80,000 and a nonworking spouse can each contribute up to the IRA limit for the year ($7,000 for 2025 and $7,500 for 2026, plus a $1,000 catch-up contribution for 2025 and $1,100 catch-up contribution for 2026 if they are age 50 or older). The contributions go into two separate IRAs, one for each spouse.
This is one of the most common ways couples double their retirement savings even if only one person is employed.
If my client participates in a 401(k) plan, can he still contribute to his own IRA?
Yes. Participating in an employer-sponsored retirement plan, whether it’s a 401(k), 403(b), or governmental 457(b) plan, does not prevent someone from contributing to a Traditional or Roth IRA.
Where things get tricky is deductibility.
If a client participates in an employer-sponsored retirement plan, his ability to deduct a Traditional IRA contribution depends on his filing status and modified adjusted gross income (MAGI).
If he is not eligible for the deduction, he can still contribute. It simply becomes a nondeductible Traditional IRA contribution.
Roth IRA contributions are still an option only if an IRA owner’s income is below the MAGI limits.
For example, a client who is a single filer earning $110,000 for 2025 and covered by a 401(k) plan may be ineligible to deduct his Traditional IRA contribution but would still be eligible to contribute to a Roth IRA.
