A Merrill Edge Traditional IRA offers tax-deferred retirement savings with no account minimum and $0 commissions. The 2026 contribution limit is $7,000 ($8,000 if 50+). For Bank of America customers, your IRA balance counts toward Preferred Rewards — potentially unlocking significant banking benefits that no other major broker can match.
2026 Traditional IRA Contribution Limits
| Detail | Amount |
|---|---|
| Annual contribution limit | $7,000 |
| Catch-up contribution (age 50+) | $1,000 |
| Total with catch-up (age 50+) | $8,000 |
| Contribution deadline | Tax filing deadline (April 2027) |
| Source | IRS Notice 2025-82 |
Who Can Deduct Traditional IRA Contributions?
Whether your contribution is tax-deductible depends on your income and whether you (or a spouse) are covered by a workplace retirement plan.
Covered by a workplace plan (2026):
| Filing Status | Full Deduction | Partial Deduction | No Deduction |
|---|---|---|---|
| Single or Head of Household | Up to $81,000 | $81,000–$91,000 | Over $91,000 |
| Married Filing Jointly | Up to $128,000 | $128,000–$148,000 | Over $148,000 |
Not covered by a workplace plan, but spouse is (2026):
| Situation | Full Deduction | Partial Deduction | No Deduction |
|---|---|---|---|
| Spouse covered by plan | Up to $236,000 | $236,000–$246,000 | Over $246,000 |
If neither you nor your spouse is covered by a workplace plan, your traditional IRA contribution is fully deductible regardless of income.
Traditional IRA vs Roth IRA: Key Differences
| Feature | Traditional IRA | Roth IRA |
|---|---|---|
| Tax on contributions | Pre-tax (deductible) | After-tax (no deduction) |
| Tax on withdrawals | Ordinary income tax | Tax-free (qualified) |
| Required Minimum Distributions | Yes, starting at age 73 | No RMDs during owner’s lifetime |
| Income limits to contribute | None | Yes ($161,000 single / $240,000 MFJ for 2026) |
| Best for | High earners now, lower income in retirement | Lower earners now, higher income in retirement |
Why Open a Traditional IRA at Merrill Edge?
Merrill Edge’s unique value for IRA holders:
- $0 account minimum — open with any amount
- $0 commissions on stock and ETF trades
- IRA balance counts toward Preferred Rewards — no other broker offers this
- BofA Global Research — free institutional-grade equity research
- Merrill Guided Investing — robo-advisor option inside the IRA
Preferred Rewards: The Merrill Edge IRA’s Unique Advantage
Your Merrill Edge IRA balance counts toward your combined balance for BofA Preferred Rewards:
| Tier | Combined Balance | BofA Card Bonus | Key Benefits |
|---|---|---|---|
| Gold | $20,000+ | +25% cash rewards | No monthly banking fees |
| Platinum | $50,000+ | +50% cash rewards | Mortgage rate discount |
| Platinum Honors | $100,000+ | +75% cash rewards | Free trades on eligible products |
Real-world example: A $50,000 Traditional IRA at Merrill Edge + $15,000 in BofA checking = $65,000 combined → Platinum tier. A BofA Unlimited Cash Rewards card at Platinum earns 2.25% cashback on all purchases (vs 1.5% base). On $2,500/month spending, that is $675/year vs $450/year — $225 in annual extra rewards funded by your IRA balance.
No other major broker offers rewards on IRA balances from your banking relationship.
Investment Options Inside a Merrill Edge Traditional IRA
| Investment Type | Details |
|---|---|
| Stocks | $0 commission |
| ETFs (iShares, Vanguard, SPDR) | $0 commission |
| Mutual funds (no-load NTF) | $0 transaction fee for eligible funds |
| Merrill Guided Investing | Robo-advisor, $1,000 min, 0.45%/year |
| Bonds and CDs | Merrill fixed income marketplace |
| BofA Global Research | Analyst reports on 3,000+ stocks |
Note: Merrill Edge does not offer fractional shares. You must purchase whole shares of any stock or ETF.
Merrill Guided Investing: Managed IRA Option
For hands-off Traditional IRA management:
- Minimum: $1,000
- Fee: 0.45% annually ($45/year per $10,000)
- With advisor access: 0.85% annual fee, $20,000 minimum
- Automatic rebalancing: Yes
At 0.45%, Guided Investing is pricier than Schwab Intelligent Portfolios ($0) and Fidelity Go (0.35%). The justification for Preferred Rewards-eligible customers is that the IRA balance drives banking rewards that can more than offset the fee difference.
Traditional IRA Tax Benefit: Worked Example
Scenario: 55-year-old BofA customer, single, earns $85,000 (above $91,000 threshold — not deductible). Contributes $8,000 anyway (non-deductible) because:
- Non-deductible contribution — no upfront deduction, but still grows tax-deferred
- Backdoor Roth option — if income exceeds deductibility limits, many investors make non-deductible traditional IRA contributions then convert to Roth (the “backdoor Roth” strategy)
- IRA balance still counts toward Preferred Rewards — the rewards value is independent of deductibility
For investors who ARE below the income threshold, a $7,000 deductible contribution in the 22% bracket saves $1,540 in federal taxes.
Traditional IRA vs Roth IRA at Merrill Edge
| Situation | Better Choice |
|---|---|
| High tax bracket now, lower expected in retirement | Traditional IRA |
| Lower tax bracket now, higher expected in retirement | Roth IRA |
| Income over $161,000 (single) — Roth phases out | Traditional IRA |
| Want to avoid RMDs | Roth IRA |
| Either way, Preferred Rewards count | Both (both count toward combined balance) |
For the Roth comparison, see the Merrill Edge Roth IRA guide.
Rolling a 401(k) Into a Merrill Edge Traditional IRA
Direct rollovers from old 401(k)s to Merrill Edge Traditional IRAs are handled at no cost. A direct rollover avoids the 20% mandatory withholding that applies to checks made payable to you.
Importantly, your rolled-over IRA balance immediately counts toward your Preferred Rewards combined balance — so a large 401(k) rollover can move you up a rewards tier.
See the Merrill Edge 401(k) rollover guide.
How to Open a Merrill Edge Traditional IRA
- Go to merrilledge.com and click “Open Account”
- Select “IRA” then “Traditional IRA”
- Complete the application with Social Security number and personal details
- Link a Bank of America account or external bank
- Contribute up to $7,000 for 2026 ($8,000 if age 50+)
Contribution deadline: April 15, 2027 for the 2026 tax year.
Bottom Line
A Merrill Edge Traditional IRA is the right choice for Bank of America customers who want their IRA balance to count toward Preferred Rewards. For non-BofA customers, Fidelity or Schwab offer ZERO/lower-cost fund options and no exit fee.
For the full Merrill Edge overview, see the Merrill Edge Review. To compare directly with Fidelity, see Merrill Edge vs Fidelity.
The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy