Frequently Asked Questions

Traditional and Roth IRAs each have their advantages and disadvantages, depending on your personal circumstances now, and at retirement age. To help you decide which option is right for you, please review our Traditional vs. Roth IRA document.

No. As a Harbor Funds shareholder you pay no annual custodial fees for your IRA investment with Harbor. This means that the full amount of your IRA contribution is credited to your account. This distinguishes Harbor from those mutual fund families that charge annual custodial fees on IRA accounts. However, other fees and expenses do apply to a continued investment in a fund and are described in the current prospectus.

Individual annual contributions are limited to 100% of earned income, up to $7,000 ($8,000 if age 50 and older) for tax year 2025, and up to $7,500 ($8,600 if age 50 and older) for tax year 2026. Unlike a Roth IRA, there are no limitations on maximum earned income to contribute to a Traditional IRA.

Spousal contributions are generally limited to 100% of earned income, up to $7,000 ($8,000 if age 50 and older) for tax year 2025, and up to $7,500 ($8,600 if age 50 and older) for tax year 2026.

Contributions to a Traditional IRA must be made from earned income; however if you are married, filing jointly, and your spouse has earned income, your spouse may contribute to an IRA on your behalf.

If neither you nor your spouse has earned income, you may not contribute to an IRA; however if you previously established an IRA while one of you had earned income, you may continue to hold your IRA at Harbor Funds without making additional contributions.

Earned income is income received for personal services rendered. Passive income, such as income from an investment, is not considered earned income for purposes of making an IRA contribution.

Unlike the regular IRA contribution rules, in which contributions are based on the individual's own compensation, the spousal IRA contribution rules allow lower-compensated or non-compensated spouses to use their spouse's compensation when determining the IRA contribution limit. You can make a spousal contribution to your IRA if you are legally married, you file a joint federal income tax return, and the receiving spouse meets certain compensation requirements.

Spousal contributions are generally limited to 100% of earned income, up to $7,000 ($8,000 if age 50 and older) for tax year 2025, and up to $7,500 ($8,600 if age 50 and older) for tax year 2026.

Please consult with a tax adviser for more details.

Contributions must be made before the filing date for an individual's income tax return in the following year, not including extensions (generally, April 15th).

There is no minimum age requirement for making contributions to a Traditional IRA.

Currently, there is no age limit on regular contributions made to traditional or Roth IRAs.

Yes, as long as the aggregate contributions do not exceed annual IRA contribution limits for the applicable tax year of the contribution.

No, you may make the catch up contribution at any time during the calendar year in which you reach age 50.

No. An individual may actively participate in an employer-sponsored 401(k) plan or in any other type of defined contribution or defined benefit plan without affecting the ability to make a Traditional IRA contribution.

All or a portion of your contribution to a Traditional IRA may be tax deductible. Deductibility depends upon your or your spouse's status as an active participant in an employer-sponsored retirement plan, your Modified Adjusted Gross Income (MAGI) and your tax filing status.

For more information, refer to our chart on Retirement Plan Limits.

Contributions are reported on Form 5498. However, the 5498 forms are not sent out until May 31st because shareholders have until the tax-filing deadline, generally April 15, to make a contribution to their IRA accounts. You are not required to attach Form 5498 to your Form 1040.

If you redeemed shares from your IRA account, you will receive a 1099-R, generally by January 31st of the following year.

Money can be withdrawn at any time. However, you may face IRS penalties. To avoid the penalties, IRA proceeds must remain in the IRA until you reach age 59 ½ or qualify for one or more of the penalty exceptions outlined in IRS Publication 590.

Once a shareholder reaches age 73 required minimum distributions (RMD) must be taken every year. If a distribution is not taken, the shareholder may face up to a 25% penalty on the RMD that should’ve been taken or 10% if the RMD is corrected within 2 years.

Beginning with the year you reach age 73, you must take your RMD by December 31st of each year; however you may defer your first RMD until April 1st of the year following the year you reach age 73.

Harbor Funds uses the Uniform Lifetime Table when calculating RMD amounts. Calculated amounts are included as a courtesy in the notice letters mailed, and may not be applicable to all IRA shareholders.

If the first distribution is deferred until the year following the year you reach age 73 (but taken before April 1st), the second distribution must still be taken by December 31st of that year, which will result in two distributions in that calendar year.

No. You may elect to receive an aggregate distribution from one IRA or a combination of IRAs held at different companies; however, it is your responsibility to ensure that the required amount for all of your IRA accounts has been taken for the year.

Qualified charitable distributions (QCDs) that are reported on your federal tax return may be used to satisfy RMDs. The requested distribution check must be made payable to the receiving charity and not you, the IRA holder.

No. You may split your contribution among multiple IRAs, but the aggregate annual contribution to all IRAs cannot exceed the annual IRA contribution limits for the applicable tax year of the contribution.

For information regarding those that may be entitled to tax relief in the wake of a natural disaster, please refer to the IRS website containing the most current press releases along with their corresponding forms of relief. Shareholders may receive assistance from the IRS in the mode of extensions and other various forms of relief if they qualify.