There are several types of individual retirement accounts (IRAs). Among the most popular is the Roth IRA. It allows you to invest taxed earnings in certain assets and withdraw those funds, tax-free, in retirement. The Roth IRA is available to most workers with some restrictions.
What Is a Roth?
A Roth IRA is a type of investment account. You can use it to invest after-tax earnings in mutual funds, equities, bonds, exchange-traded funds (ETFs), and certificates of deposit (CDs).
Withdrawals from a Roth IRA are tax-free once you reach age 59 1/2 and hold the account for at least five years. You may qualify for earlier tax-free distributions if you meet specific eligibility requirements.
Unlike a traditional IRA, distributions obtained through a Roth IRA are not subject to the 3.8% Net Investment Income Tax. They are not included in your modified adjusted gross income (MAGI), and there are no mandatory withdrawal requirements. You can hold onto your Roth IRA as long as you like without withdrawing invested funds.
Who Can Contribute?
The Internal Revenue Service (IRS) restricts Roth IRAs to those who meet the following requirements:
Earned Income
All contributions to a Roth IRA must come from earned income. The IRS defines earned income as:
- Wages
- Salaries
- Tips
- Self-employment income
- Professional fees
- Taxable alimony
- Nontaxable combat pay and military differential
- Bonuses
Excluded from earned income are investment gains, retirement distributions, unemployment, and Social Security benefits.
No Age Limit
There are no age restrictions on Roth IRAs. Whether you’re 18 or 83, you can contribute to a Roth IRA if you have earned income.
Income Limitations
As of 2025, the maximum contribution limits on a Roth IRA are $7,000 annually, and $8,000 for individuals aged 50 or older. Roth IRAs are subject to a phase-out based on your filing status and MAGI. The 2025 phase-out contribution ranges are:
Once you reach the maximum MAGI for your tax filing status, you can no longer contribute to a Roth IRA.
Roth IRA for Spouses
You may set up a Roth IRA for a non-working spouse. In this arrangement, the non-working spouse owns the account, and the working spouse contributes earnings up to the annual maximum allowance ($7,000, or $8,000 for individuals aged 50 or older). Spousal Roth IRAs are available for couples who file a married filing jointly return.
Spousal Roth IRAs are subject to the same MAGI restrictions, and all contributions must come from earned income.
Deadlines for Making Contributions
You may make Roth IRA contributions at any point during the year, or up to the tax filing deadline. For most individuals, the tax deadline is April 15, 2026.
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