Roth IRA 2026: Contribution Limits, Income Limits & What to Invest In

Figures below come from IRS Notice 2025-67 (published November 2025) and were checked on October 19, 2026. Limits change every year, so confirm them at irs.gov before you act.

2026 Roth IRA limits at a glance

You also cannot contribute more than you earned in the year. If you earn $4,000, your limit is $4,000, not $7,500.

2026 Roth IRA income limits

Whether you can contribute directly depends on your Modified Adjusted Gross Income (MAGI) and filing status.

Example: income inside the phase-out range

A single filer with MAGI of $160,000 falls inside the $153,000–$168,000 range:

• Portion of the range passed: ($160,000 − $153,000) ÷ $15,000 ≈ 46.7%
• Reduction: $7,500 × 46.7% ≈ $3,500
• Allowed contribution: about $4,000

The IRS worksheet rounds the result up to the nearest $10. The official method is in IRS Publication 590-A.

Example: one working spouse

If you file jointly and only one spouse has earnings, the other can still contribute through a spousal IRA, as long as the working spouse's earnings cover both contributions and your MAGI is under the limits above.

What if you earn too much? The backdoor Roth

Above the income limit you can still get money into a Roth IRA with a "backdoor Roth":

1. Contribute to a Traditional IRA (non-deductible).
2. Convert it to a Roth IRA.

Roth IRA vs. 401(k) limits in 2026

• Roth IRA: $7,500 ($8,600 if 50+). You open it yourself at any brokerage.
• 401(k): $24,500 employee contribution limit for 2026, through your employer. Catch-up amounts for age 50+ are listed in IRS Notice 2025-67.

The two limits are separate, so you can use both. Read more in our Roth vs Traditional IRA guide and our 401(k) index funds guide.

How much can it grow? A simple example

Contributing $7,500 a year for 40 years at a constant 7% annual return, with contributions at year-end, ends at roughly $1.5 million, of which $300,000 is your own money. This is a hypothetical: it ignores inflation, and real returns are never constant.

What to invest in inside a Roth IRA

A Roth IRA is a tax account, not an investment. What you hold inside decides your result. For long horizons, low-cost broad index funds are the usual fit:

• U.S. total market: FZROX (Fidelity), VTI or VTSAX (Vanguard), SWTSX (Schwab)
• S&P 500: FXAIX (Fidelity), VOO (Vanguard), IVV (iShares)
• Simple two-fund mix: a U.S. fund plus an international fund, for example 80% VTI and 20% VXUS

Compare the options in detail in our S&P 500 vs total market, VOO vs VTI and FZROX vs VTSAX guides. Check each fund's current expense ratio on the provider's own site before you buy.

Why stocks here? Growth inside a Roth is tax-free, so many investors place their highest-growth assets in it and keep bonds in tax-deferred accounts. This is called asset location. It is a common approach, not a rule: your risk tolerance and time horizon come first.

What to avoid

• Funds with high fees (around 1% or more), which eat into the tax-free benefit
• Leaving everything in cash for decades
• Speculative bets: losses inside a Roth IRA cannot be deducted

Common mistakes

• Contributing over the limit. Excess contributions face a 6% excise tax each year unless you withdraw them, with their earnings, or apply them to the next year.
• Forgetting the limit is combined across all your IRAs.
• Waiting until April. Contributing early gives your money more time in the market.

How to open one

1. Check your income against the limits above.
2. Choose a provider. Fidelity, Vanguard and Schwab all offer Roth IRAs (see how to open a Roth IRA).
3. Pick your fund and set up automatic contributions: $625 a month reaches $7,500 a year.

Sources

• IRS: 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500 (Notice 2025-67)
• IRS Publication 590-A: Contributions to Individual Retirement Arrangements