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‘Can I contribute to a Roth IRA (Individual Retirement Account)’ is a popular question that a lot of people are asking as they hear the rumors that the Social Security funds may be depleted in their lifetime. A Roth plan is one that can be set up with a banker or a broker of your choice. The Roth plan is treated differently than the other plans when it comes to tax advantages. Funds that are left in the Roth are not taxes and the interest earned and left in the account are also exempt from taxation. You must leave the funds in until you reach the age of 59 ½. The account must be open for a minimum of five years.

You can contribute to a Roth IRA, but you must do so only in the amounts that are allowed by the Internal Revenue Service (IRS). You must earn income in the year that you contribute to the account and you must limit the contribution to $5,000 if you are less than 50 years of age. If you are 50 you can put in up to $6,000 if you earn that much income during the tax year. You can add funds to the account from other retirement accounts without exceeding the contribution limit.

The Roth IRA was created so that individuals that fall in the middle income class can have retirement funds. The IRS have income limits for participation in this type fund and these are called phase out rules. As you meet and exceed the income cap, the amount that you can put into the account is eventually eliminated. In 2011 the limit for taxpayers in the single filing status were limited to income of $107,000 before the phase out rule became effective. Income that exceeded $122,000 had a contribution limit of zero. You can find the amount you can contribute to a Roth IRA in IRS Publication 590 for your filing status and for the tax year in which you are adding to the fund.

There are no age restrictions on putting money into the Roth, but you will not be able to contribute to the other retirement accounts if you are more than 70 ½ years of age. If you are the owner of other retirement accounts you will still be eligible for an IRA under the Roth plan. You will not be able to deduct the contribution amounts on the federal income tax return that you file. You also will not have to pay taxes on the amounts that you withdraw from the fund after to reach the age of 59 ½. The fund will have to be in place for five years. You have the entire calendar year in which to make the contribution to the Roth fund. But unlike the conventional retirement accounts that limit you to the tax year, you can contribute to a Roth IRA at any time up to the time that you file your income tax return for the tax year.