Yes, you can contribute to an IRA after you retire, but you'll need to have a certain amount of “earned income” to do so. Earnings from work come in the form of salaries, tips, or bonuses, so you'll likely need to have at least some type of part-time work. An IRA (and its corollary, the Roth IRA) is a tax-advantaged form of retirement account that allows you to save money during your working years so that you can withdraw it during retirement. There's no age limit for contributing to an IRA, meaning you can do so at any time in your life.
However, you can only contribute earned income to this account, not investment income. So, even if you're technically retired, you must work in some way to make additional contributions to the IRA. A financial advisor may be able to help you determine how to manage your IRA. SmartAsset's free advisor search tool can help you find advisors who serve your area.
Keep in mind that you can contribute to an IRA during retirement even if you've started collecting Social Security benefits. But keep in mind that what you get from Social Security doesn't qualify as earned income and therefore can't be contributed to an IRA. . Many people assume that retirement savings will run out after they retire, and that's when you're supposed to start receiving Social Security benefits, a pension (if applicable), and withdrawals from your savings and investments.
If you are retired and your spouse has earned income, he or she can contribute to their own IRA and also make what is called a spousal contribution to your IRA. The time is almost here to put your workdays behind you and start relying on your Individual Retirement Account (IRA) and other investments. While it may seem like a good idea to continue saving money during retirement, it's wise to first consider the pros and cons before adding money to an IRA after retirement. After confirming that you are eligible to make contributions to an IRA during retirement, you may need guidance on how much you can contribute or help evaluating whether a Roth or a traditional IRA is better for you.
Setting aside and budgeting your IRA contributions during retirement can help you reduce other expenses. If your spouse continues to work and has earned income, you can set up and fund a Roth IRA for you, even if you don't work actively. It's possible to continue contributing to a traditional IRA even if you're officially retired, but you're still working or providing services of whatever type you're paid for, and you can document or file on your tax return. However, you must be working while you're retired; you can only make IRA contributions with the income you earned from this job; and you can't contribute to your IRA or Roth IRA more than you earned in that tax year.
Putting your money into an IRA when you've retired may mean keeping it for a certain period of time. If you had a SIMPLE IRA or an SEP IRA but have retired from that job, you can still open an IRA through investment firms such as Vanguard or Fidelity. If you (or your spouse) don't have any type of retirement plan, you can apply for the full deduction of an IRA. But what's better for retirees, a Roth IRA or a traditional IRA? The potential tax-exempt withdrawals offered by Roth IRAs are an attractive advantage, but some people may benefit more from the tax-deductible contributions that traditional IRAs involve.