Anyone who has taxable income can contribute to an IRA, according to Charles Schwab. Taxable income may come from wages, tips, disability benefits, benefits from a union strike or self-employment income.Continue Reading
Individuals may only contribute to a traditional IRA until they reach the age of 70 ½, according to the Internal Revenue Service. People of any age may contribute to a Roth IRA.
During 2014 and 2015, the total amount an individual can contribute to her IRA accounts is $5,500 per year for anyone under the age of 50 and $6,500 for anyone age 50 or older, states the IRS. No one can contribute an amount greater than her taxable income. Contributions must be made by the tax deadline, so any 2014 IRA contributions must be made by April 15, 2015.
People with IRA accounts may begin withdrawing money from the account at any time, according to the IRS. Those with a traditional IRA must begin taking distributions the year after they turn 70 ½. The Roth IRA does not have a mandatory age when individuals must start taking distributions.
Withdrawals from a traditional IRA are considered taxable income, while withdrawals from a Roth IRA are not taxed, states the IRS. However, individuals might have to pay an additional 10 percent tax on both types of IRA accounts if they take distributions before the individual turns 59 ½ years old.Learn more about Financial Planning