To open an IRA, you need a Social Security number, earned income, a government-issued ID, and a way to fund the account. Most brokerages and banks let you complete the entire process online in under 20 minutes. Here’s what to gather before you start.
Earned Income Is the Core Requirement
You can only contribute to an IRA if you have earned income. That means wages, salaries, tips, net self-employment earnings, or other taxable employee pay. Investment income, rental income, pensions, and Social Security benefits don’t count. If your only income comes from those sources, you’re not eligible to make IRA contributions.
A few less obvious types of income also qualify: strike benefits from a union, nontaxable military combat pay (which you can elect to count), disability retirement benefits received before minimum retirement age, and gross income earned as a statutory employee. If you’re self-employed, your net earnings from your business count, including ministerial income and housing allowances for clergy (which count toward self-employment earnings even though they’re generally exempt from income tax).
One important exception: a non-working spouse can open and contribute to a “spousal IRA” as long as the other spouse has enough earned income to cover both contributions. You file a joint tax return, and each spouse can contribute up to the annual limit into their own separate IRA.
Personal Information You’ll Provide
Every brokerage or bank will ask for the same core set of personal details during the application:
- Social Security number or Individual Taxpayer Identification Number (ITIN). This is required for tax reporting. The IRS tracks your contributions and distributions by this number.
- Date of birth. Your age determines your contribution limit and whether you can take penalty-free withdrawals.
- Government-issued photo ID. A driver’s license or passport satisfies this for identity verification.
- Home address. Must match your ID or other records on file. A P.O. box alone usually won’t work.
- Employment information. Most applications ask for your employer’s name and address, or your self-employment status.
- Bank account and routing numbers. You’ll need these to link a checking or savings account so you can transfer money into the IRA.
Some firms also ask about your annual income and net worth. This isn’t a qualifying test for a basic IRA, but brokerages collect it to comply with financial regulations and to determine your eligibility for certain investment products.
Choosing Between Traditional and Roth
You’ll need to pick an account type when you apply. The two main options are a Traditional IRA and a Roth IRA, and they handle taxes differently.
With a Traditional IRA, your contributions may be tax-deductible in the year you make them, which lowers your current tax bill. You pay income tax later when you withdraw the money in retirement. With a Roth IRA, you contribute money you’ve already paid taxes on, but qualified withdrawals in retirement come out completely tax-free, including all the investment growth.
Your income level and whether you’re covered by a workplace retirement plan affect the tax benefits of each type. Traditional IRA deductions phase out at certain income levels if you or your spouse participate in an employer plan like a 401(k). Roth IRA contributions phase out entirely above a separate set of income thresholds. If your income is too high for direct Roth contributions, you may still be able to contribute to a Traditional IRA (without the deduction) and convert it to a Roth, a strategy sometimes called a “backdoor Roth.”
How Much You Can Contribute
For 2026, the annual contribution limit across all your Traditional and Roth IRAs combined is $7,500. If you’re 50 or older, you can contribute up to $8,600. Your total contribution for the year can’t exceed your taxable compensation, so if you earned $4,000, that’s your cap regardless of the official limit.
You don’t have to contribute the maximum, and you don’t have to fund the account all at once. Many people set up automatic monthly transfers. You have until the tax filing deadline (typically April 15 of the following year) to make contributions that count for a given tax year.
Naming Your Beneficiaries
During the application, you’ll be asked to designate beneficiaries. This determines who inherits the account if you pass away, and it overrides whatever your will says, so it’s worth getting right from the start.
For each beneficiary, you’ll need their full legal name, address, date of birth, Social Security number, and the percentage of the account they should receive. You can name primary beneficiaries (first in line) and contingent beneficiaries (who inherit if the primary beneficiary has already passed away). Make sure the percentages add up to 100% at each level. You can name a spouse, children, a trust, a charity, or virtually anyone.
Funding the Account
Once the account is open, you need to put money in it. There are several ways to do this:
- Electronic bank transfer. The most common method. Link your checking or savings account and transfer funds directly. Initial transfers can take a few business days to clear.
- Rollover from another retirement account. You can move money from a 401(k), 403(b), or another IRA into your new account. A direct rollover (where the funds transfer institution to institution) avoids withholding and potential penalties.
- Check deposit. Some providers accept mailed checks or mobile check deposits made payable to the custodian.
- Payroll deduction. Some employers offer payroll deduction IRA programs that send contributions directly from your paycheck to your IRA at a financial institution you choose.
Many online brokerages have no minimum initial deposit to open an IRA, though some mutual fund companies or banks require $500 to $3,000 to get started. Check the provider’s requirements before you apply so you’re not caught off guard.
Where to Open an IRA
You can set up an IRA at a bank, credit union, brokerage firm, mutual fund company, life insurance company, or robo-advisor. The right choice depends on how you want to invest. If you want to pick individual stocks, ETFs, and bonds, an online brokerage gives you the widest selection. If you prefer a hands-off approach, a robo-advisor will build and rebalance a portfolio for you, typically for a small annual fee. Banks and credit unions offer IRAs that hold certificates of deposit or savings products, which are FDIC-insured but tend to grow more slowly.
Compare account fees before you commit. Look for annual maintenance fees, trading commissions, and expense ratios on the funds available. Many large brokerages have eliminated trading commissions on stocks and ETFs and charge no annual account fee, making cost less of a differentiator than it used to be.