How to open a Traditional IRA

If neither you nor your spouse is covered by a workplace plan, the deduction is available at any income.

If you are covered, the 2026 phase-out runs $81,000 to $91,000 for single filers and $129,000 to $149,000 for married filing jointly.

Above the range you can still contribute, without a deduction, and that non-deductible money creates basis you have to track.

The deduction is worth most when your current marginal rate is high and you expect a lower one later.

A Roth is generally better early in a career, and better for anyone who wants tax-free income to draw on in retirement.

Where the traditional contribution would not be deductible anyway, a Roth is almost always the stronger choice if your income permits one.

Check the firm in FINRA BrokerCheck and confirm SIPC membership, which takes a minute.

Compare on the cost of the funds you intend to hold rather than on account fees, which are widely zero at major brokers.

If you expect to roll a workplace plan in later, confirm the provider accepts incoming rollovers, which nearly all do.

Social Security number, date of birth, address and employment details, plus a bank account to fund it.

Name a beneficiary during the application. An IRA passes by designation rather than by will, and a blank field creates problems for the people who inherit it.

Approval is usually immediate, with occasional manual verification adding a day.

Transfer the money and choose the tax year deliberately, since providers default to the current one.

The contribution arrives as cash and stays there until you buy something, which is the step most new accounts miss.

A broad index fund or a target-date fund handles the decision for most people, and having something invested matters more than picking the optimal thing.

File Form 8606 for that year to record the non-deductible amount as basis.

That basis comes back untaxed on withdrawal, proportionally across all your traditional IRAs rather than first.

It also sets up the pro-rata rule if you later convert to Roth, which is why people planning a backdoor Roth try to keep pre-tax IRA balances at zero.

A traditional IRA that receives money from a former employer plan is often called a rollover IRA, though it is the same account type.

Keeping rollover money in its own account preserves the option of moving it into a future employer's plan, which some plans require to be unmixed with personal contributions.

That option matters most to anyone using a backdoor Roth, since clearing pre-tax IRA balances into a 401(k) is what makes the conversion cheap.

Eligibility, deduction phase-outs, contribution rules and Form 8606 basis tracking are in IRS Publication 590-A, with 2026 figures from Notice 2025-67. Broker registration can be checked at FINRA BrokerCheck. Walnut is informational and is not an investment adviser. This guide is educational and not personalized tax or investment advice.