Chartered Retirement Planning Counselor (CRPC) Practice Exam 2025 - Free CRPC Practice Questions and Study Guide

To contribute to a Roth IRA, individuals must have earned income, which typically comes from wages, salaries, or self-employment income. This requirement is crucial because the IRS stipulates that contributions to a Roth IRA can only be made from money earned through work, ensuring that the funds being contributed are tied to labor or compensation for services rendered.

Having earned income qualifies a person to make contributions within certain income limits, benefiting from the advantages of tax-free growth and tax-free withdrawals in retirement. Unlike traditional IRAs, there is no age restriction for contributions as long as the income requirement is met.

While unearned income, such as dividends or rental income, can be an important aspect of an individual’s financial situation, it does not meet the requirement for funding a Roth IRA. Enrollment in an employer-sponsored plan or maintaining a minimum account balance are not necessary conditions to contribute to the account. Thus, the primary and essential requirement that enables contribution to a Roth IRA is having earned income.