Often there is confusion about what constitutes a “contribution” and a “rollover” into an IRA. This post is intended to clear up the difference.
While both activities are technically contributions, there’s a major difference between the two. The most significant of the differences is that with a regular annual contribution there are several limits imposed that can be quite restrictive.
Annual Contribution Limits
For an annual contribution to a traditional IRA or a Roth IRA, you are limited to the lesser of $5,000 or your actual earned income for the year. If you have no earned income, you’re not allowed …Read More