Who Can Make a Full Contribution to a Traditional IRA?

Learn about the rules for making contributions to traditional IRAs and who is eligible to contribute. Find out how to open an IRA and what investments are allowed.

Who Can Make a Full Contribution to a Traditional IRA?

Contributions to an IRA are not the same as accruals or transfers, so they will have an effect on your ability to fund a traditional IRA. The combined contribution limit allows you to make contributions to either a traditional IRA or a Roth IRA. If you don't have taxable compensation, but you are filing a joint return with a spouse who does have income, you can open an IRA in your name and make contributions through a spousal IRA. Even if you are of retirement age, you can still contribute to a Roth IRA and make cumulative contributions to either a Roth or traditional IRA. You can open a traditional IRA through a bank, brokerage agency, investment fund, or insurance company and invest your money in stocks, bonds, mutual funds, exchange-traded funds, and other approved investments.

This means that if you are retired and no longer earning compensation, you cannot make a contribution to an IRA, although you can transfer or rollover money from a 401(k) to an IRA. People who have multiple IRAs or who set up automated contributions that are too high could end up investing too much money in either a Roth IRA or a traditional IRA.

Ruthie Cacibauda
Ruthie Cacibauda

Passionate creator. Freelance coffee geek. Unapologetic tv trailblazer. Professional internet junkie. Wannabe music lover. Hipster-friendly beer geek.

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