Social Security Income Cannot Be Contributed to an IRA, IRS Rules

Retirement changes many aspects of financial life, including stopping contributions to retirement accounts. However, those working past retirement age may still save in an IRA. The IRS determines eligibility based on earned income.

Kathy B., 72, asked if she could continue contributing to her Roth IRA after losing her job. Her only income for 2026 will be Social Security and VA DIC benefits.

Social Security and VA DIC are not considered earned income by the IRS. Therefore, they cannot be deposited into an IRA. Examples of earned income include wages, self-employment, and taxable alimony.

IRA contribution limits apply even with earned income. The IRS warns that contributions from ineligible income may result in a 6% penalty if not withdrawn by Tax Day.