Dear Retirement Adviser,
I opened a traditional individual retirement account before I retired in 2010. I am currently employed part time. Can I still make monthly contributions to this IRA? If possible, I’d like to continue putting money away and get the tax advantage.

— Cathy Contributes

Dear Cathy,
As long as you, or you and your spouse (assuming you are married and filing a joint tax return) have taxable compensation to contribute, you can always put money aside in a traditional IRA before the tax year you reach 70 1/2 years of age. The ability to make tax-deductible contributions can be limited, depending on whether you or your spouse is covered by an employer retirement plan. You could still contribute using after-tax dollars.

You can make monthly contributions during the tax year to the account. You don’t have to wait until the end of the year to contribute. Making regular contributions has the benefit of “dollar-cost averaging” your investment over the year, versus investing a lump sum at just one point in time.

IRAs held with mutual fund companies as the custodian often allow account holders to set up an automatic investment program. This allows investments of smaller amounts to purchase additional shares of mutual funds already owned in the account. Tax-advantaged retirement accounts typically have lower account minimums for mutual funds than taxable accounts.

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