Guides · Markets & investing
IRAs: Limits, Phase-Outs, and the Backdoor
An IRA is the account you open yourself, with no employer involved. It has smaller limits, better investment choices, and income rules that quietly lock high earners out of the front door.
One limit, however many accounts
The 2026 IRA contribution limit is $7,500, with an extra $1,100 from age 50 for $8,600 total.
That limit is the total across every IRA you own, not a per-account allowance. Three IRAs at three brokerages share one $7,500 between them, and it's shared between Traditional and Roth as well — putting the full amount in a Roth leaves nothing for a Traditional the same year.
This is separate from and additional to a 401(k). Someone contributing the full $24,500 at work can still fund an IRA on top, which is the part that surprises people who assume the accounts compete.
$7,500 across all IRAs combined — Traditional and Roth together, however many accounts you hold.
Two different income rules, constantly confused
Roth IRAs have an income limit on contributing at all. For single filers in 2026 the phase-out runs $153,000 to $168,000 of MAGI; for married filing jointly it's $242,000 to $252,000. Above the top, direct Roth contributions are closed.
Traditional IRAs have no income limit on contributing. Their income rules govern only whether the contribution is deductible, which is a completely different question — a high earner covered by a workplace plan can always put money in, they just may get no deduction for it.
That distinction is not a technicality. It's precisely what makes the backdoor Roth possible: the front door to a Roth can be closed while the door to a nondeductible Traditional contribution stays open, and conversions have no income limit at all.
The backdoor, and the trap inside it
The backdoor Roth is two steps: contribute to a Traditional IRA without taking a deduction, then convert that to a Roth. Since conversions carry no income limit, this reaches a Roth from above the phase-out.
The trap is the pro-rata rule. The IRS treats every Traditional, SEP and SIMPLE IRA you own as a single pot when calculating the tax on a conversion. If 90% of that pot is pre-tax money, then 90% of your supposedly nondeductible conversion is taxable — you cannot select which dollars convert.
People discover this at tax time, having assumed the new contribution converts cleanly. The rule looks only at IRAs, not 401(k)s, which is why rolling pre-tax IRA money into a workplace plan first is the common workaround. This is genuinely complex territory and a place to involve a tax professional rather than an app.
2026: $7,500 IRA limit. Roth eligibility phases out at $153,000-$168,000 for single filers. The backdoor exists, and so does the pro-rata trap.