IRA or Roth IRA Contribution – No Earned Income
Hello.
I was teaching a retirement planning class last night, and we were discussing IRA and Roth IRA Contribution Eligibility.
A lady is a non-working spouse, and her husband is retired, so they have no earned income.
Is she eligible to contribute to a Traditional or a Roth IRA?
Thanks.
Permalink Submitted by Alan - IRA critic on Fri, 2019-03-08 16:31
No, there must be earned income (actually taxable compensation is the correct term) to fund any IRA contribution. If one of them has taxable compensation, the other (if under 70.5) could also make a spousal contribution to a TIRA or to a Roth IRA at any age. These rules apply for regular contributions, but taxable comp is not needed to convert to a Roth IRA.
Permalink Submitted by Adrienne Calomino on Tue, 2019-03-12 15:13
If I put my pension check from a qualified source and put it into a Roth IRA and have no taxable employment compensation, am I still subject to a penalty?
Permalink Submitted by Alan - IRA critic on Tue, 2019-03-12 15:50
See your other post for response.