As savers and investors across the country continue to look for ways to reduce their taxable income and increase their savings, the IRA continues to be a popular way for people to save for retirement.

For many, the individual retirement account is still a mysterious entity and the perplexity alone causes people to shy away from them. Worse, they assume the IRA is a vehicle exclusively available to the wealthy or well connected. While the first point is understandable, the second point just plain isn’t true.

Established by the Tax Reform Act of 1986, the IRA is a means of providing individuals a tax-advantaged option for retirement savings. Millions of Americans have used the account to set aside money for retirement while enjoying a break on their tax returns.

One of the best features is that almost anybody can take advantage of the IRA. Here are the guidelines for who can invest in an individual retirement account.

Contribution Limits

In order to contribute to a traditional IRA or its tax-free counterpart, the Roth IRA, you must have earned income.

Individuals can contribute up to $5,000 per year or 100% of your earned income for the year, whichever is less. If you’re over the age of 50, the IRS allows a provision for catch-up contributions. This provision lets you contribute an additional $1,000 for a total annual contribution of $6,000.

Going forward, annual contribution limits are raised in accordance with inflation and would be increased in $500 increments.

Income Limits

With the traditional IRA, anyone with earned income can contribute but you’ll need to remain below a Modified Adjusted Gross Income level in order for your contribution to be tax deductible.

Up to income limits of $52,000 for single filers and $83,000 for joint filers, the traditional IRA contribution is fully deductible before it begins getting phased out. If you earn more than $62,000 for single filers and $103,000 for joint filers, you are only eligible for a non-deductible contribution. If you’re not covered by a retirement plan at work such as a 401(k), these income limits do not apply and the entire contribution would be tax deductible.

Roth IRA contributions are non-deductible in all instances (the tax-free status of withdrawals makes up for the possible tax deduction of the contribution) and, unlike the traditional IRA, carry income restrictions for making a contribution.

The limit for Roth contributions currently is $101,000 for single filers and $159,000 for joint filers. Earn more than that and eligibility begins being phased out. If you make more than $116,000 as a single filer or $169,000 for joint filers, you are ineligible for a Roth IRA.

Since its inception, the IRA still remains one of the best options out there for saving for retirement. Regardless of the option that fits best with your personal situation, the tax advantages that come with either type of account will add real dollars to your retirement nest egg.

Make sure that you take advantage of it!