Traditional & Roth IRAs
American Funds® IRAs offer tax-advantaged savings, a broad range of investment choices, low fees and superior service.
How it works
TRADITIONAL IRAS
You won’t pay taxes on your earnings until you make a withdrawal.
You may qualify for a tax deduction on contributions if you are within certain household income limits.
ROTH IRAS
Your contributions are made after you’ve already paid taxes on that money, so your contributions are always tax-exempt. Earnings are tax-exempt if the withdrawal is qualified.
No required minimum distributions (RMDs) during the account owner’s lifetime.
Eligibility
TRADITIONAL IRAS
You (or your spouse if filing a joint return) can contribute if you have taxable compensation (a salaried job, investments or other sources).
ROTH IRAS
You (or your spouse if filing a joint return) can contribute if you have taxable compensation and your income level is under certain limits. Income limits for 2026 are as follows:
Single filers with a modified adjusted gross income (MAGI)1 of:
$153,000 or less — full contribution
$153,001–$167,999 — partial contribution
$168,000 or more — not eligible
Joint filers with a MAGI of:
$242,000 or less — full contribution
$242,001–$251,999 — partial contribution
$252,000 or more — not eligible
Married, filing separately with a MAGI of:
$0–$9,999 — partial contribution
$10,000 or more — not eligible
Contribution limits2
TRADITIONAL IRAS
For 2026, individuals can contribute up to $7,500 (plus an additional $1,100 for those age 50 or over). Couples filing jointly can contribute up to $15,000 ($17,200 if both are age 50 or over).
ROTH IRAS
For 2026 individuals can contribute up to $7,500 (plus an additional $1,100 for those age 50 or over). Couples filing jointly can contribute up to $15,000 ($17,200 if both are age 50 or over). Contribution limits are reduced or eliminated at higher incomes, as shown in the Eligibility section above.
Setting up an account
You can invest in American Funds through most online brokers or by working with your financial professional. Don't have a financial professional?
Roll over an account
If you’re changing jobs or retiring, you can roll your money from an employer-sponsored retirement plan into an IRA to retain the tax-advantaged status of your savings, avoid potential withdrawal penalties and consolidate retirement accounts.
(A rollover of pretax savings from an employer plan to a traditional IRA is not a taxable event. A rollover of pretax savings to a Roth IRA is a taxable event.)
Investment options
Target date funds
Convenience
Select a target date fund that is based on your nearest anticipated retirement date.
A single investment provides a fund-of-funds portfolio of actively managed American Funds aligned with an investor’s time horizon.
Individual mutual funds
Customized
Build a retirement savings portfolio of American Funds tailored to your specific needs.
1 Modified gross adjusted income (MAGI) is calculated by subtracting certain expenses and allowable adjustments from gross income. To determine your MAGI, contact your tax advisor.
2 Future contribution limits may be adjusted for cost-of-living increases. Contributions for the current tax year must be made by April 15 of the following year, unless that date falls on a Saturday, Sunday or legal holiday. In those cases, the due date is delayed until the next business day.