Can i contribute to an ira if i have no earned income?

If you find yourself in one of the above situations, you may be able to make a contribution to an IRA for the year in which you receive the income. People who earn money by self-employment or with side jobs can create a simplified employee pension IRA (SEP-IRA), even if they also work for an employer and participate in a 401 (k) program. Investors who don't qualify to contribute to a Roth IRA have other options for obtaining tax advantages from retirement accounts, including traditional IRAs or employer-sponsored retirement savings plans, such as 401 (ks). If your income exceeds the limit to contribute to a Roth IRA, but you want to enjoy the tax advantages it offers, consider a strategy known as a “clandestine Roth IRA.” If you think your IRA could benefit from spousal contributions, talk to your team of professionals.

Even if your income doesn't qualify you for tax-deductible contributions, that doesn't mean you can't save money on a spousal IRA. Davidson, a brokerage firm, told The Balance in a telephone interview that the firm's clients make extensive use of marital Roth IRAs and the clandestine Roth strategy. The IRS has a modified adjusted gross income (MAGI) limit to qualify to contribute to a Roth IRA. It's known as a spousal IRA, but it's simply a traditional or Roth IRA in the name of the non-working spouse and to which both partners can make contributions.

Roth IRAs appeal to many because contributions are made after paying taxes, and so you don't have to pay taxes when you withdraw money when you retire. You can open an IRA and contribute to it if you (or, if you file a joint return, your spouse) received taxable compensation during the year. While there are no income limits to be able to contribute to a traditional IRA, the amount that can be contributed to a Roth IRA decreases when the AGI reaches certain levels and eligibility is completely eliminated above a certain income. Keep in mind that a spousal Roth IRA allows a working spouse to contribute to a Roth for a non-working spouse as long as all other eligibility requirements are met.

There are no mandatory minimum distributions after traditional IRA funds are converted to Roth IRA funds.