General IRA Eligibility

• In general, to open any type of IRA, one must be a U.S. citizen over the age of 18. Investment brokerage firms or banks with investment brokerage divisions usually offer IRAs. As such, an individual must also possess the items necessary to open a new account, such as a state-issued identification card or driver's license.
  
  

Types of IRAs

• There are five main types of IRAs. The Roth IRA allows individuals to contribute to the account with after-tax income and to withdraw earnings at, or after, retirement age tax-free. Traditional IRA contributions are made with pre-tax income, and taxes are deferred until withdrawals made at retirement age. The SEP-IRA can be offered by businesses or held by self-employed persons, and contributions are made with pre-tax income, though the contribution limits vary depending on the SEP-IRA holder's income. The SIMPLE IRA is an employer-provided retirement account, similar to a pre-tax 401k but with lower contribution limits, and the Self-Directed IRA, which allows holders to invest their contributions in a wide range of investments, such as franchises.
  
  

Traditional IRA Eligibility

• Traditional IRAs are either deductible or non-deductible. The deductible IRA allows an individual to deduct the total amount of their contribution made during a given calendar year from their taxes. Deductions can only occur if one falls within certain income limits, currently $52,000 for individuals and $89,000 for married couples, before the amount an individual can deduct is incrementally reduced. Once one's income reaches $62,000 for individuals ($109,000 for married couples), they may not deduct any portion of their IRA for a given calendar year.
  
  

Roth IRA Eligibility

• Roth IRA contributions are made with after-tax income, however a Roth IRA holder typically pays no taxes on withdrawals taken after they have retired. However, in order to qualify for a Roth IRA, one must fall within certain income limits: $105,000 for individuals and $167,000 for married couples. If an individual makes between $105,000 and $120,000 (or a married couple between $167,000 and $177,000), they may be eligible to make a partial contribution to their Roth IRA.
  
  

Eligibility for Other IRA Types

• SEP-IRAs may be held by the self-employed, or by business owners who use SEP-IRAs as their retirement plans. Similarly, SIMPLE IRAs may be held by employees whose employers have chosen this type of IRA as their retirement plan. Any one at any brokerage or other financial services firm that offers them can open self-Directed IRAs. Self-Directed IRAs can be either Traditional or Roths. Traditional and Roth IRA eligibility requirements and income limits apply to the Self-Directed Traditional IRA and the Self-Directed Roth IRA, respectively.