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

A Roth IRA is a retirement savings account you can open at a bank, brokerage, or credit union. The main requirement is that you must have earned income — money from a job, self-employment, or freelance work — in the year you want to contribute. You also cannot earn above a certain income threshold, which changes each year and depends on your filing status.

Unlike a traditional IRA, you do not need to be a certain age to open one, and there is no age limit for opening. You can open a Roth IRA at 18, 35, or 72. The income limits are what actually stop most people from opening or contributing to one.

Key Takeaways

  • You must have earned income in the tax year you contribute, and your total income cannot exceed the annual limit set by the IRS, which varies by filing status.
  • You can open a Roth IRA at any age as long as you have earned income, and there is no upper age limit.
  • The income limits change each year — for 2024, single filers cannot earn more than $146,000 to contribute the full amount, and married filers cannot earn more than $230,000.
  • You can open a Roth IRA through most banks, brokerages, and credit unions by providing your Social Security number, address, and employment information.
  • If your income exceeds the limit, you may still be able to contribute through a backdoor Roth conversion, though this involves a separate process.

Income limits that determine whether you can contribute

The IRS sets income limits for Roth IRA contributions each year. These limits are based on your modified adjusted gross income (MAGI) and your filing status. If your income is below the limit, you can contribute the full amount allowed that year. If your income is above the limit, your contribution amount phases out — meaning you can contribute less, or nothing at all.

For 2024, the income limits are: single filers up to $146,000; married filing jointly up to $230,000; and married filing separately up to $10,000. These numbers change annually, usually increasing slightly. The IRS announces the new limits in October or November for the following year.

Your income is measured by your tax return. If you are self-employed, you report your net business income. If you work a job, your employer reports your wages. Freelance income, rental income, and investment income do not count as earned income for Roth IRA purposes.

What "earned income" means and what does not count

Earned income is money you receive for work you actually do. This includes W-2 wages from an employer, net self-employment income, and compensation from a business you own. Alimony also counts as earned income for Roth IRA purposes.

These do not count: investment returns, rental income, Social Security benefits, pension payments, unemployment benefits, interest, or dividends. If you are retired and living on investment income, you cannot open or contribute to a Roth IRA. If you are married and one spouse has no earned income, that spouse cannot contribute to their own Roth IRA, even if the other spouse has high income.

How to open a Roth IRA account

Opening a Roth IRA is straightforward. You choose a financial institution — a bank, brokerage firm, or credit union — and contact them to open an account. Most offer online applications that take 10 to 15 minutes. You will need your Social Security number, current address, date of birth, and employment information.

The institution will ask whether you want to invest in stocks, bonds, mutual funds, or keep cash in the account. You do not have to decide this before opening; many people open the account first and decide how to invest later. Some institutions have minimum opening balances (often $0 to $500), though many have no minimum.

Once your account is open, you can contribute money whenever you want during the tax year or up until the tax filing deadline the following year (usually April 15). You do not have to contribute the maximum amount — you can contribute $100, $1,000, or any amount up to your limit.

Age and citizenship requirements

There is no minimum age to open a Roth IRA as long as you have earned income. A teenager with a summer job can open one. There is also no maximum age — you can open a Roth IRA at 65, 75, or any age, as long as you have earned income that year.

You must be a U.S. citizen or resident alien to open a Roth IRA. Resident aliens are typically people with a green card or who meet the substantial presence test. Non-residents cannot open one, though there are limited exceptions for certain visa holders with U.S. earned income.

What happens if your income exceeds the limit

If your income is above the Roth IRA limit for your filing status, you have two options: contribute a reduced amount (if you are in the phase-out range), or use a backdoor Roth conversion. A backdoor Roth involves contributing to a traditional IRA first, then converting it to a Roth IRA. This is legal but involves extra steps and tax considerations.

Some people also use a mega backdoor Roth through their employer's 401(k) plan if the plan allows it. This is a separate process from opening a personal Roth IRA and requires your employer's plan to offer after-tax contributions and in-service conversions.

If you are unsure whether a backdoor Roth makes sense for your situation, you may want to speak with a tax professional, as the rules are complex and mistakes can trigger unexpected tax bills.

Frequently Asked Questions

Can I open a Roth IRA if I am unemployed or retired?

No, you must have earned income in the year you contribute. If you are retired and living on Social Security or investment income, you cannot contribute to a Roth IRA. However, if you have a spouse with earned income, your spouse can open and contribute to their own Roth IRA.

Can I open a Roth IRA for my child?

Yes, if your child has earned income — from a job, modeling, acting, or a family business — you can open a custodial Roth IRA for them. The contribution limit is based on their earned income, not your income. You manage the account until they reach the age of majority (usually 18 or 21, depending on your state).

What if I do not know my exact income for the year?

You can contribute based on your best estimate, then adjust if needed when you file your tax return. If you over-contribute, you can withdraw the excess and any earnings before the tax deadline to avoid penalties. The financial institution can help you with this process.

Do I need to have the money in the account before I open it?

No. You can open an empty Roth IRA account and fund it later. Many people open the account first, then transfer money in over time or make a single contribution before the tax deadline.