How to Contribute to a Rollover IRA

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Just because you have rolled your IRA or qualified plan into another IRA doesn't mean that you can't contribute to it anymore. Making contributions to a rollover IRA is the same as contributing to any other IRA, and the same annual dollar contribution limits apply.

  • Decide how much money you wish to contribute to your rollover IRA. There is an annual dollar limit on contributions, with deductibility subject to certain restrictions for traditional IRAs. If you are contributing to a traditional IRA and also participate in a qualified plan through your employer, then the amount of your deduction for your contribution may be limited. IRA owners must be at least least 18 years of age to control the account themselves. Custodial IRAs can be opened for minors. Money cannot be withdrawn from either traditional or Roth IRAs until age 59 1/2; early distributions are assessed a 10 percent penalty. However, qualified exceptions do apply, such as for death, disability, and home and education expenses. Traditional IRA owners must also begin taking mandatory minimum distributions at age 70 1/2.

  • Write a check made payable to your IRA custodian. Write the year of your contribution on the memo line of the check. For example, if it is before April 15 and you are making a contribution for the previous year, you should specify that on the check so that there is no confusion about which year the contribution is for. Remember that you cannot contribute more than the maximum dollar amount that is allowed each year. In 2010 the limit is $5,000 for those under age 50. Those age 50 and above can make an additional "catch up" contribution of a thousand dollars. These limits apply to both traditional and Roth IRAs.

  • Send the check to your IRA custodian. You can also move funds directly from a bank or money market account into your IRA in some cases; if you have both accounts with the same institution, then this may be possible.

  • Look at your account statement or online history and verify that your contribution is recorded correctly. Both the amount and the year of contribution should match what you wrote on your check.

  • Invest your contribution appropriately. If you are investing your IRA in a certain fund or stock, purchase more shares. Or you might want to diversify your investments and purchase shares in a different fund or security.

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