The IRS limits how much I can put in a Roth IRA each year. Last year I earned a lot. I put $5,500 into my Roth but I saved the rest. This year I am back in school and have no income. Can I contribute another $5,500 this year from my savings? Can I contribute to my Roth even if I don’t have a job?

– Back in Business School at 32.

Normally, you can only contribute to your Roth IRA if you have what the IRS calls “earned” income. The exception is that if you are married, your spouse can contribute to your Roth for you from his or her earnings. In fact, we even have a blog post explaining how that works.

Roughly speaking, “earned income” is income on which you are required to pay FICA and Social Security taxes.

Earned income obviously includes wages, salaries, and tips, all of which are subject to FICA and Social Security taxes. Earned income also includes profit from self-employment because you have to pay self-employment taxes. Earned income also includes things like union strike benefits and long-term disability benefits before retirement.

Some examples of things that are not considered earned income include interest and dividends from your investments, capital gains, Schedule K-1 income from businesses, Social Security, pensions, child support, royalties, and unemployment benefits.

If all your income comes from the second category or if you don’t have any income at all, you unfortunately cannot contribute to your Roth IRA this year.

This makes it all the more important to contribute to your Roth IRA every year you can.

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