A Roth IRA and a regular IRA are among the most valuable retirement saving opportunities. As a result, motivated savers often ask themselves, “Can I contribute to both a regular and a Roth IRA?” It’s an important question, but the answer requires some background.
Who Can Contribute to an IRA?
Everyone who earns compensation can contribute to an IRA. In addition, married individuals who do not personally earn compensation may still contribute to a spousal IRA if their spouse works. Regardless, income from interest, dividends, and capital gains alone does not allow one to contribute to an IRA.
How Much You Can You Contribute to an IRA?
Provided your compensation is at least as much, taxpayers under 50 years old may currently contribute $5,000 per year to their IRA. Those at least 50 years old may contribute an additional $1,000 annually.
How Does Your Income Affect Your Contribution Limit?
Although some high income tax payers have IRA deduction limitations, your income does not affect your ability to actually make a regular IRA contribution. (The deduction might be limited, but not your contribution). However, certain upper income taxpayers may not contribute to a Roth IRA due to the Roth IRA contribution limits.
Can I Contribute to a Regular and a Roth IRA?
Provided you meet the compensation requirements and the income limitations for each type of IRA, you may contribute to both a Roth and a regular IRA. However, the combined amount may never exceed $5,000 (or $6,000 if you are 50 or older). Therefore, should a 45-year old be eligible and choose to contribute $3,500 to his Roth IRA, the most he could contribute to a regular IRA for the same tax year is $1,500.