US rules
IRA (Individual Retirement Arrangement)
Educational only, not financial advice.
An IRA (individual retirement arrangement) is a U.S. retirement account you open yourself at a bank or brokerage, separate from any workplace plan.
Why it matters
- You can contribute if you, or your spouse if you file jointly, have taxable compensation.
- For 2026 the IRS limit across all your traditional and Roth IRAs combined is $7,500, or $8,600 at age 50 or older, or your taxable compensation if less.
- Traditional IRA contributions may be deductible; the deduction can be limited if you or your spouse have a retirement plan at work.
- Excess contributions left in the account are taxed at 6% a year.
Simple example
- You put $4,000 in a Roth IRA and $3,500 in a traditional IRA in 2026. Together that uses the full $7,500 limit.
Canadian equivalent
A traditional IRA is closest to an RRSP.
Related terms
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Sources
Reviewed by Greg Parsons. Links checked October 14, 2026. Educational only, not financial advice.