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.