IRA qualifications are relatively straightforward. The first requirement is that you must have earned income in order to contribute to an IRA. With that stipulation, the number of people currently on the unemployment rolls who wish to make IRA deposits cannot do so from the unemployment compensation that they are receiving. Even those persons who in previous months or years have made good salaries with solid profit-making companies, once they became unemployed and started receiving unemployment checks as opposed to gainful employment - they cannot make deposits to their IRA from these incomes. Since this would not qualify as earned income, it would not be available for IRA deposits.



Money that qualifies for IRA deposits would be: wages, salaries, professional fees and any other amounts that are received for services rendered. It seems pretty clear that it must be earned income, although this issue comes up all the time with CPAs and financial planners. Especially in the days of high unemployment, those people that have taught themselves to save and invest, they still wish to save and invest even when their income has changed dramatically.



Not included in earned income would be: income from property, interest, dividends, capital gains, disability payments, social security and unemployment compensation. Although each of these are treated as income for tax return purposes, the difference in the qualification is the designation of 'earned' income.

The Roth IRA qualifications are a bit different than the general qualifications. These regulations are in place by the IRS to inhibit those persons with very high income from placing their money into this protected plan. If your single income is $110,000 annually or higher, or if married and your combined income is $160,000 or higher, you will not qualify for investment into a Roth IRA. One other restriction to contributing to a Roth IRA is that you cannot contribute more than what is equal to your annual income.

There are many options for contributing funds. You are not restricted to the rules that govern IRAs of any kind. You may invest in mutual funds, securities, notes, certificates of deposit and common stocks. You do not need to believe that the only way to plan for retirement is by depositing money into an IRA. Even though IRAs are the vehicle of choice for most persons working toward retirement, they are not the only way to save money for your golden years.