What Is the Minimum Initial Investment for a Traditional IRA?
A traditional Individual Retirement Account (IRA) is a retirement savings investment vehicle that provides tax advantages for investors. A traditional IRA is a basic tax-deferred investment instrument. It is different from a Roth IRA or a SIMPLE IRA. The IRS sets limits on contributions made to an IRA, which may not be the same for everyone.
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General Limit
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According to the IRS, there is no minimum initial investment for a traditional IRA. However, the IRS does set maximum investment amounts. The general maximum investment limit per year for people under 50 years of age is $5,000. For anyone 50 years old or older, the maximum limit is $6,000 per year.
Divorce
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If you and your spouse are divorced, you are not allowed to contribute to your spouse's IRA account.
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Catching Up
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The IRS makes allowances for additional contributions above the general limit if your employer went bankrupt in the last year. In that case, the IRS generally allows you to contribute an additional $3,000 if you were previously enrolled in an employer sponsored retirement plan.
Multiple IRAs
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If you have multiple IRAs, your maximum annual contribution must be divided among all your IRAs. The combined total of all your contributions is still subject to the same limit.
Non-transferable
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IRA contribution maximums do not transfer to other years. For instance, if you only contributed $3,000 last year and your maximum amount was $5,000, you cannot use the remaining $2,000 to increase contributions for this year.
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