Skip to main content
Topic index
AAIAll About Investing
Menu
All articles

Who Can Open a Roth IRA and How to Get Started

By Felix Thorpe · Retirement Accounts Writer

Yes, you can open a Roth IRA if you have earned income and meet the income limits

You can open a Roth IRA as long as you have earned income — money from a job, self-employment, or freelance work — in the year you contribute. The IRS does not care about your age, employment status, or whether you already have other retirement accounts. What matters is your modified adjusted gross income (MAGI) for that tax year. If your MAGI exceeds the limits set by the IRS, you cannot contribute the full amount, and above a certain threshold, you cannot contribute at all.

The income limits change each year and depend on your filing status. For 2024, if you file as single, your ability to contribute phases out between $146,000 and $161,000 of MAGI. If you file as married filing jointly, the phase-out range is $230,000 to $240,000. If you file as married filing separately, the limits are much lower. The IRS publishes updated limits each January, so check the current year's limits before you open an account or make a contribution.

Key Takeaways

  • You need earned income in the year you contribute, but there is no age requirement — you can open a Roth IRA at any age as long as you have a job or self-employment income.
  • Your income must fall below the IRS phase-out range for your filing status; if it exceeds the upper limit, you cannot contribute that year.
  • You can open a Roth IRA at a bank, brokerage, or credit union by providing your Social Security number, address, and employment information.
  • The contribution limit for 2024 is $7,000 per year if you are under 50, or $8,000 if you are 50 or older; you can only contribute what you earned that year.

Who cannot open a Roth IRA

You cannot open a Roth IRA if you have no earned income in the year you want to contribute. This rules out people living on investment returns, Social Security, pensions, or spousal support alone. If you are retired and have no W-2 income or self-employment income, you cannot fund a new Roth IRA that year.

You also cannot contribute if your MAGI exceeds the upper limit for your filing status. There is no workaround at that income level — the account itself can exist, but you cannot add money to it. Some people in this situation use a backdoor Roth conversion, which involves contributing to a traditional IRA and then converting it to a Roth, but that strategy has its own rules and tax consequences.

How to open a Roth IRA account

Open a Roth IRA by contacting a bank, brokerage firm, or credit union and requesting a Roth IRA account application. Major brokerages like Fidelity, Vanguard, and Charles Schwab offer them, as do most banks and credit unions. You can usually start the process online in 10 to 15 minutes.

You will need to provide your Social Security number, date of birth, address, and employment information. The institution will verify your identity and may ask for a copy of your driver's license or passport. Once approved — usually within one to three business days — you can fund the account by transferring money from your bank account or by depositing a check.

You do not need to open the account by December 31 to contribute for that tax year. You can open it in January, February, or even April of the following year and still contribute for the prior year, as long as you do so before the tax filing deadline (usually April 15). The account opening date and the contribution date are separate.

Contribution limits and earned income rules

The most you can contribute to a Roth IRA in 2024 is $7,000 if you are under 50, or $8,000 if you are 50 or older. This limit applies across all your IRAs combined — if you have both a Roth IRA and a traditional IRA, your total contributions to both cannot exceed the limit.

You can only contribute up to the amount of earned income you made that year. If you earned $3,000 from a part-time job, you can contribute a maximum of $3,000 to your Roth IRA, even if the annual limit is $7,000. If you are married and your spouse has no earned income, your spouse cannot have a Roth IRA contribution that year unless you file jointly and use a spousal IRA strategy, which allows a working spouse to fund an IRA for a non-working spouse.

Income limits by filing status

The IRS sets income phase-out ranges that determine how much you can contribute based on your filing status and MAGI. For single filers in 2024, the phase-out range is $146,000 to $161,000. For married filing jointly, it is $230,000 to $240,000. For married filing separately, it is $0 to $10,000 — essentially, married couples filing separately cannot contribute to a Roth IRA unless their MAGI is under $10,000.

If your MAGI falls within the phase-out range, you calculate a reduced contribution limit using an IRS worksheet. If your MAGI exceeds the upper limit, you cannot contribute at all that year. These limits are adjusted annually for inflation, so the numbers change each January. Check the IRS website or your brokerage's website for the current year's limits before you contribute.

What happens if you exceed the income limit

If your MAGI exceeds the upper limit for your filing status, you have two options: do not contribute that year, or use a backdoor Roth conversion. A backdoor Roth involves contributing to a traditional IRA (which has no income limit) and then converting it to a Roth IRA. This strategy works, but it has tax consequences if you have other traditional IRAs with pre-tax balances, and it requires careful record-keeping.

If you contribute to a Roth IRA when your income exceeds the limit, the IRS treats the excess contribution as a mistake. You can withdraw the excess and any earnings on it by the tax filing deadline to avoid a 6 percent penalty tax. If you do not withdraw it, you owe the 6 percent penalty each year the excess remains in the account. It is simpler to check your income before you contribute.

Roth IRA versus other retirement accounts

A Roth IRA is one of several ways to save for retirement. If you have access to an employer 401(k) or 403(b), you can contribute to both a Roth IRA and your employer plan in the same year — they have separate contribution limits. A Roth IRA offers tax-free growth and tax-free withdrawals in retirement, while a traditional IRA or 401(k) offers an upfront tax deduction but taxes withdrawals in retirement.

If your income is too high for a Roth IRA but you have an employer plan, you can still use the employer plan to save. If you are self-employed, you can open a Solo 401(k) or SEP IRA, which have higher contribution limits than a Roth IRA. The right account depends on your income, your employer's offerings, and your tax situation.

Frequently Asked Questions

Can I open a Roth IRA if I am retired?

Only if you have earned income that year. If you are retired and living on Social Security or investment returns, you cannot contribute to a Roth IRA. If you do part-time work or have self-employment income, you can contribute up to that amount.

Can I open a Roth IRA for my child?

Yes, if your child has earned income. A child who works a summer job or does freelance work can open a Roth IRA and contribute up to their earned income for that year. You can help them fund it, but the contribution must come from their earnings.

What if my income changes after I contribute?

If your income rises after you contribute, you do not have to withdraw the money. The contribution limit is based on your income at the time you contribute. If you contributed when your income was below the limit, the contribution is valid even if your income rises later that year.

Can I have both a Roth IRA and a traditional IRA?

Yes, but your total contributions to both accounts combined cannot exceed the annual limit. If you contribute $4,000 to a traditional IRA, you can contribute only $3,000 to a Roth IRA that year (assuming the $7,000 limit applies to you).

Do I need to report my Roth IRA on my tax return?

You do not report the account itself, but you must report excess contributions if you made them. If you contributed more than the limit or your income exceeded the phase-out range, you report the excess on Form 5329 when you file your tax return.