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Greetings, Soltan, and welcome. You wrote:

<<My wife opened a Regular IRA and made contributions for 1999($2000). She opened a 401k (for year 2000) at work and deposited $250.00 in it before getting laid off. She has taken the 401k money and rolled it into her IRA (mentioned above).

First question, can she add $1750 (To total $2000 for year 2000) more into the Regular IRA for 2000 contributions? I was told she couldn't and I just wanted to make sure. I was also told that she could open a Roth-IRA for year 2000 and she could place $2000 dollars in there. Is that true?>>

The rollover of 401k money does not count against the $2K IRA contribution limit. She may still contribute the full $2K to an IRA for 2000. Thus, she would end up with $2,250 if she did so in the same IRA; however, on doing so she would lose any eligibility to transfer the $250 to a new employer's 401k in the future. Given that's a small sum, that's no big loss.

<<Second question, if she opens a Roth-IRA can she still continue to contribute $2000 in the years to come even if she is not working?>>

As long as you have the earned income to support that contribution, fall under the Roth AGI limits, and file a joint return, then yes she can.

For more on IRAs, visit our IRA area at

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