Written by:  Davis Barry


Answering the question, “If I am not currently employed can I contribute to a Roth IRA?”


Yes, there are a few instances where you may contribute to a Roth IRA even when you are not currently employed.  Those include:


    • You have earned income from earlier in the year, or the previous year if you are looking to make a previous year contribution before the April tax filing deadline. (You may not make a previous year contribution after the April tax filing deadline, even if you have filed an extension.) Note that deferred compensation, annuities, pensions, social security benefits, dividends and interest do not qualify as earned income.


    • You are married, file your taxes as “married filing jointly,” and your spouse has earned income. The couple’s combined contribution is limited to twice the 2016 maximum individual contribution ($5,500/person or $6,500/person if age 50 or older) or the total earned income of the couple, whichever is less.  So when total earned income is less than twice the 2016 maximum contribution limit the non-working spouse may not be able to make the maximum contribution, or make a contribution at all. For example, if the working spouse was age 50 and had earned income of $10,000 in 2016 then they could contribute $6,500 to their Roth IRA and the non-working spouse could make a contribution of only $3,500, or $10,000 less $6,500.


  • You receive taxable alimony payments. Important to note is that, unlike alimony, child support is not considered earned income for Roth IRA contribution purposes.  Therefore, receiving solely child support in a year does not allow you to contribute to a Roth IRA.

Even if you meet one or more of the above scenarios it is important to remember that income limitations still apply, which will prevent you from making a Roth IRA contribution. The 2016 Roth IRA income phase-out you should be aware of is $117,000 – $132,000 for single tax filers and $184,000 – $194,000 for “married filing jointly” filers. If your income falls within this range you may be able to make a partial contribution. However, if your earned income is greater than the upper boundary of the phase-out range, you may not make a Roth IRA contribution for 2016. High earners may still be able to make a non-deductible Traditional IRA contribution and convert the contribution to a Roth IRA at some point in the future.

Please note that each individual’s situation is unique.  To understand how the general information presented in this post applies to you, please consult with your financial advisor or a member of our team.