Core Insights - The article discusses the eligibility criteria for deductible IRA contributions in 2026, emphasizing the impact of income and marital status on these deductions [2][4][6] Group 1: Deductible IRA Contributions - High earners who are active participants in employer-sponsored retirement plans, such as 401(k)s, face limitations on deductible IRA contributions based on their income and marital status [4][6] - For single active participants, the income threshold for full deductibility is $81,000 or less, with a reduced amount applicable for incomes between $81,000 and $91,000, and no deduction for incomes above $91,000 [6] - For married couples filing jointly, the thresholds are $129,000 for full deductibility, $129,000 to $149,000 for a reduced amount, and no deduction for incomes exceeding $149,000 [6] Group 2: Contribution Limits and Non-Deductible Contributions - The annual limit for IRA contributions will increase to $7,500 for adults under 50 and $8,600 for those aged 50 or older by the end of 2026 [6] - Individuals who cannot deduct their contributions can still make non-deductible IRA contributions, which do not provide an initial tax break but allow for tax-deferred growth on earnings [7][10] - Non-deductible contributions may lead to a higher tax bill in the year they are made, but withdrawals of these contributions will not incur taxes [9][10] Group 3: Tax Implications and Alternatives - Withdrawals from traditional IRAs containing both deductible and non-deductible contributions are taxed proportionally, meaning a portion of the withdrawal may be tax-free [11] - Individuals may consider contributing to a Roth IRA instead, which allows for tax-free growth and withdrawals under certain conditions, or increasing contributions to employer-sponsored plans like 401(k)s, which may offer higher deductible limits [12][13]

Core Insights - Converting $100,000 per year from a traditional IRA to a Roth IRA can help reduce required minimum distributions (RMDs) and related taxes in retirement, despite creating current tax liabilities [1][5] - An incremental Roth conversion approach can distribute the tax impact over time, keeping individuals in lower tax brackets based on total income for the year [2][5] - Roth IRAs are not subject to RMD rules, allowing savers to avoid mandatory withdrawals in the future, although immediate ordinary income taxes are triggered upon conversion [5][6] RMD Basics - Traditional IRA holders must start taking annual RMDs at age 73, which are based on IRS life expectancy tables and account balances, potentially pushing retirees into higher tax brackets [4][7] - The first-year RMD for a $900,000 IRA, assuming a 5% growth rate, would be approximately $81,734 when the account holder turns 73 [7] Roth Conversion Considerations - A Roth conversion requires careful planning, as withdrawals cannot be made within five years of opening the account, regardless of age [6] - Working with a financial advisor can provide personalized guidance on Roth IRA conversions and retirement planning decisions [3]

Contribution Limits - The IRS has increased the IRA contribution limit for 2026 to $7,500, up from $7,000 [1][14] - For individuals aged 50 and older, the total allowed contribution including catch-up contributions is $8,600 [1][14] Types of IRAs - The contribution limit applies to both traditional IRAs and Roth IRAs, or a combination of the two [1][2] - There are no income limits for contributing to a traditional IRA, but income limits apply for deductions if covered by a workplace retirement plan [8] Catch-Up Contributions - Individuals aged 50 and older can make an additional catch-up contribution of $1,100 [1][2] RMDs (Required Minimum Distributions) - Traditional IRAs are subject to RMDs, which are required once the account holder reaches age 73, as per the Secure Act 2.0 [12] - Roth IRAs do not have RMDs, allowing for tax-free growth without mandatory withdrawals [12] Deadlines - The deadline to fund an IRA for the tax year 2026 is April 15, 2027 [17]