Can I still contribute to my Roth?

[Guest otown_29]

I originally opened my ROTH about 6 years ago when I was making less than $100K a year. About 3 years ago I advanced nicely and now make around $175K a year.

I was under the impression that since I make more than is allowed for ROTH contribution that I can no longer put money into it.

I was having a discussion with a co-worker on this topic and he said that you can only open it if you qualify, you can contribute no matter how much you make once you have it open.

Is this true? If so, I've been putting money into a traditional for years when I could have been adding to my ROTH.

Thanks in advance!

[Appleby]

You have been doing the right thing. Your friend has the explanation transposed. The income limits apply to contributing to your Roth IRA, not establishing a Roth IRA. You can always transfer or rollover existing Roth IRA balances to your new Roth IRA- no income limits apply to these transactions. But for years that your income exceeds the limits, you are not eligible to contribute (new funds) to your Roth IRA.

[John G]

Supporting and clarifying Applebys comments:

Roth qualification is something that happens each year. The result of one year has no impact on other years. Some folks also think they can't maintain a Roth if they no longer qualify to contribute. Not true. The mathematics of qualifying is on a yearly basis. Once a Roth is established, you may not qualify to add to it, but the Roth lives on.

Congratulations on your success. Hopefully there are other tools like 401k, ESOP, 403B or pension/profit sharing that may help you build wealth.

PS: Co-workers are rarely a great source for technical issues. I am happy you posted here.

[Guest otown_29]

I am very happy as well. So far I have been a pretty smart investor (given the economy and all) and I am always trying to research everything before reacting to it.

One more question if you guys don't mind. Why does the income limit jump up if you are married? I though IRAs were based on the "individual"?

I am getting married in a few weeks. My Fiance has a ROTH and makes around $60K a year. Combined we are well over $200K so does this impact both of us, or can she still contribute to hers?

Thanks again for all of your help!

[BPickerCPA]

Neither one will be able to contribute if you are married and your combined income is over $160K.

[John G]

Why? There is not a great answer to why they structured the Roth limits the way they did. But, since you will soon be married, you live (and die) by IRS rules governing married couples. Perhaps the rules will be changed again and you can participate with a Roth in the future.