Can Money Be Added to an Existing Roth IRA Account?
The Roth IRA, an account for your personal retirement savings, has been in existence since 1998. You can continue to make contributions to a Roth account throughout your lifetime.
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Benefits
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In addition to the benefit of a lifetime of contributions, another Roth IRA benefit is tax-free growth of your investment. Although you must contribute after-tax money to a Roth, future withdrawals are not taxed, provided certain criteria are met.
Limitations
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There are limits to the amounts you can contribute to a Roth IRA. You may only contribute up to $5000 annually. If you are 50 or older, you may contribute up to $6000 each year. There is no restriction on contributions when you reach age 70 ½ as there are with traditional IRAs.
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Other Restrictions
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The IRS has other rules and restrictions for contributions to existing Roth IRA accounts. First, you must have "compensation income" in order to add money to your Roth IRA. Compensation includes "wages, salaries, tips, fees, bonuses, commissions, and self-employment income." Additionally, your contributions may be restricted when your modified adjusted gross income reaches certain thresholds.
Traditional IRAs
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You may add money to your existing Roth IRA and to an existing traditional IRA in the same tax year. However, the maximum amounts apply to both accounts. If you add $4000 to one, you may only add the other $1000 ($2000 if you're over 50) to the other one.
Tax Year
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You have until the tax filing deadline of the following year to add funds to your existing Roth IRA. For most people, that means funds can be added until April 15th and will count as the previous year's contribution.
IRS Publication 590
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The IRS fully explains the rules and regulations for both Roth and traditional IRAs in Publication 590. This booklet also contains worksheets for any necessary calculations. Find the link to this guide in the Resource Section below.
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