Traditional IRA Account Details

For many years the Traditional IRA was the only type of IRA available to those investing for retirement. Even after the tax-free Roth IRA was introduced in 1997, some investors still find that the Traditional IRA fits well in their retirement investment plan.


  • You may be able to deduct some or all of your contributions, including catch-up contributions, depending on your income, filing status and participation in an employer-sponsored retirement plan.
  • Generally, earnings grow tax deferred and are taxed at your ordinary income tax rate upon withdrawal.
  • For American Century® Brokerage accounts, CheckWriting is available to investors who are over age 59½.


  • You or your spouse (if one of you are not working and you file a joint return) must have earned income during the year.

Investment Choices

  • Funds held directly with American Century Investments®: Select from a variety of mutual funds based on your risk tolerance and investment objectives.
  • American Century Brokerage: Choose from over 10,000 mutual funds, as well as publicly traded stocks, bonds, and more.

Minimum Initial Investment

  • Funds held directly with American Century Investments: $1,000 per fund. Some funds may require higher minimums.
  • American Century Brokerage: $1,000 per account.

Annual Contribution Limits

Annual Contribution Limits for Individuals

  • 2020 $6,000
  • 2021: $6,000

Annual "Catch-Up" Contribution Limits for Individuals Age 50 and Older (in addition to annual contribution):

  • 2020: $1,000
  • 2021: $1,000

Deductible Traditional IRA Phaseouts

Deductibility depends on Modified Adjusted Gross Income (MAGI)1 and whether you or your spouse is covered by an employer-sponsored retirement plan. You must figure your deduction and your spouse's deduction separately. The deduction for contributions to Traditional IRAs phases out over the following MAGI levels:

Covered by Employer Plan


  • 2020: $65,000-$75,000
  • 2021: $66,000-$76,000

Married Filing Jointly

  • 2020: $104,000-$124,000
  • 2021: $105,000-$125,000

Not Covered by Employer Plan

Single or married filing jointly with a spouse who also is not covered

  • 2020: No limit
  • 2021: No limit

Married filing jointly with a spouse who is covered

  • 2020: $196,000-$206,000
  • 2021: $198,000-$208,000

There is no income limit for contributions to a non-deductible Traditional IRA.


  • Begin taking penalty-free withdrawals from a Traditional IRA at age 59½, however taxes will apply to these withdrawals.
  • Withdrawals for special purposes may be permitted prior to retirement.
  • The IRS requires you to take money from a Traditional IRA when you reach a certain age. These withdrawals are called required minimum distributions (RMDs).
  • The SECURE Act, effective January 1, 2020, changed the age at which RMDs begin. Learn more by reviewing our RMD Guide.
    • If you were born before 7/1/1949, you must begin RMDs at age 70½.
    • If you were born on or after 7/1/1949, you must begin RMDs at age 72.


Service Fees

  • Funds held directly with American Century Investments: A $25.00 annual account maintenance fee is charged to investors whose total investments with us are less than $10,000 for each taxpayer identification number (for example, Social Security number).
  • American Century Brokerage: A $50 annual custodial fee is charged per account. This fee is waived for Platinum, Gold and Silver Priority Investors or if the balance of the account is over $10,000. See Fees and Commissions for more information.

Secure Online Account Access

Simply create a User Name and Password and Log In for secure online account access, to:

  • View account balances
  • Conduct online transactions
  • View online statements and tax forms (if available)
  • Perform account maintenance, such as changing your address*
  • And more.

* Certain online transactions and maintenance are not available for all accounts, including American Century Brokerage accounts.

1 Modified Adjusted Gross Income (MAGI) is your Adjusted Gross Income (AGI) with standard deductions included.

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IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.

This information is for educational purposes only and is not intended as a personalized recommendation or fiduciary advice. There are different options available for your retirement plan investments. You should consider all options before making a decision. Our representatives can help you evaluate all of your distribution options.

Brokerage Services are provided by American Century Brokerage, a division of American Century Investment Services, Inc., registered broker/dealer, member FINRA, SIPC.