Who Is Eligible for a Traditional IRA?

A traditional IRA (individual retirement account) is a savings account that is specifically earmarked for retirement. Like any other retirement plan, there are a number of eligibility requirements that an individual must meet in order to invest in a traditional IRA.

Age

The investor must be under the age of 70 1/2 by the end of the year, in order to be eligible to establish and invest in a traditional IRA.

Earned Income

The individual must have an income in the form of a salary, wages, commissions, alimony or any other income earned from providing personal services.

Spouses

An investor can set up and contribute to a traditional IRA for a spouse who has little or no income.

Individual

Only individuals can establish this type of retirement account -- hence the name "individual retirement account." For example, spouses cannot open a joint traditional IRA; each spouse will have to set up an individual account.

No Income Limits

Unlike many other retirement plans, there are no maximum income-eligibility requirements to set up a traditional IRA.