American Funds IRAs offer tax-advantaged savings, a broad range of investment choices, low fees and superior service.
Traditional IRAs
Roth IRAs
Rollover IRAs
Benefits
Your earnings grow tax-deferred until withdrawn.
You may qualify for a tax deduction on contributions if you are within certain household income limits.
Your contributions are made with after-tax money; so, withdrawals from your contribution (basis) amount are always tax-free.
No required minimum distributions (RMDs) from the original owner.
If you’re changing jobs or retiring, you can enjoy continued tax-deferred growth or a consolidation opportunity.
(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.)
Pricing
You pay a one-time setup fee of $10 and an annual custodial fee of $10.
You pay a one-time setup fee of $10 and an annual custodial fee of $10.
There is no fee for rolling over to an IRA.
You pay a one-time setup fee of $10 and an annual custodial fee of $10 for a traditional or Roth IRA.
Eligibility
Anyone who earns income through employment.
A nonworking spouse who files a joint return that includes earned income.
2020
Single filer with modified adjusted gross income (MAGI)1of:
- $124,000 or less — full contribution
- $124,001—$138,999 — partial contribution
- $139,000 or more — not eligible
Joint filers with MAGI of:
- $196,000 or less — full contribution
- $196,001—$205,999 — partial contribution
- $206,000 or more — not eligible
Married, filing separately with MAGI of:
- $0–$9,999 — partial contribution
- $10,000 or more — not eligible
Contribution Limits2
For 2020, the lesser of 100% of taxable compensation or $6,000 ($1,000 catch-up for owners age 50 or over); or $12,000 for couples filing jointly ($14,000 if both age 50 or over).
Same as traditional IRA, subject to eligibility restrictions based on MAGI (noted above).