What investments are available to someone with no earned income?

By Denise Appleby AAA
A:

Disability income, such as income received by disabled veterans, is not considered "compensation" for the purpose of contributing to an IRA. However, all is not lost. You may invest your income in bonds, mutual funds or other assets. Some investments allow you to defer paying taxes on the interest and other earnings until you cash-in the investment (similar to earnings in Traditional IRAs). With other investments, the interest/earnings may be taxed in the year they are received.

For more detailed information, you should contact your financial advisor or financial institution and ask to speak with someone who is knowledgeable about the tax treatment of the return on investments. They should be able to provide investment options that suit your specific needs. (To learn more about bonds, see our Bond Basics tutorial. For more on mutual funds, see our Mutual Fund Basics tutorial.)

This question was answered by Denise Appleby
(Contact Denise)

RELATED FAQS

  1. What is the difference between portfolio management and financial planning?

    Understand the difference between financial planning and portfolio management, and learn which financial professionals can ...
  2. What advice has Richard Branson given to would-be entrepreneurs?

    Discover how entrepreneur Richard Branson amassed his fortune, and learn what words of wisdom he offers to others trying ...
  3. What advice has Jeff Weiner given to would-be entrepreneurs?

    Read advice on entrepreneurship from Jeff Weiner, the billionaire media tycoon who helped build the worldwide social media ...
  4. Should I attempt to trade futures myself using software, or is this better left in ...

    Discover the factors to consider when deciding whether to trade futures on your own or to commit your trading decisions to ...
RELATED TERMS
  1. Fintech

    Fintech is a portmanteau of financial technology that describes ...
  2. Endowment Effect

    The endowment effect describes a circumstance in which an individual ...
  3. Anchoring and Adjustment

    Anchoring and adjustment is a cognitive error described by behavioral ...
  4. Robo-advisor (robo-adviser)

    Definition of Robo Financial Advisers
  5. Custodial Agreement

    An arrangement whereby one holds an asset or property on behalf ...
  6. Investment Counsel Association Of America - ICAA

    A non-profit organization whose members work in the investment ...

You May Also Like

Related Articles
  1. Professionals

    How to Evaluate a Robo-advisor

  2. Professionals

    Who Wants to be a 401(k) Millionaire?

  3. Professionals

    Are Longevity Annuities in 401(k)s a ...

  4. Professionals

    Should Investors Nix Actively Managed ...

  5. Professionals

    How to Train Your New Financial Advisor

Trading Center