Roth and IRA contributions without earned income?
Groups | Search | About
User Password
Register Now! Lost Password?

Financial Planning - Financial planning in general. (Moderated) 

get this group's latest topics as an RSS feed add this group's latest topics to your My MSN content add this group's latest topics to your My Yahoo content  add this group's latest topics to your Google content  YahooMyWeb Yahoo!  Google Google  Windows Live Favorites Windows Live  del.icio.us del.icio.us  digg digg  Add to Netscape Netscape
Subject Author Date
Roth and IRA contributions without earned income? sailor1x 03-25-2008
Posted by on March 25, 2008, 5:31 am

If I retired in February 2008 and will only gross $5000 total income
for the year, can I contribute $6000 to a Roth IRA and $5000 to a
traditional IRA for 2008? Does interest and dividend income have any
effect on what I can contribute? Do I understand the rules correctly
that I cannot make contributions unless I am employed?

DTW

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.


Posted by on March 25, 2008, 7:57 am
sailor1x@hotmail.com writes:

> If I retired in February 2008 and will only gross $5000 total income
> for the year, can I contribute $6000 to a Roth IRA and $5000 to a
> traditional IRA for 2008?

No, but that has nothing to do with your earnings. You can
*never* contribute $6000 to a Roth and $5000 to a traditional
IRA in a single year. The limit for contributions to IRAs -
Roth and Traditional - is a *combined* limit. If you're over
50, you can contribute a total of $6000 to your IRAs. That
may be $4000 in the Roth and $2000 in the Traditional - or
whatever other split you like. But the total cannot be more
than $6000. (see more details about this posted about a
week ago on the newsgroup. Or see the "How Much Can Be
Contributed" section under Roth IRAs in IRS pub 590. For
the 2007 version, it's the bottom right of page 60)

> Does interest and dividend income have any
> effect on what I can contribute? Do I understand the rules correctly
> that I cannot make contributions unless I am employed?

You do not have to be employed at the time you make the
contributions. But you do have to have *earned* income
in the year for which the contributions apply. So if your
earnings for 2008 are $5000, you may contribute $5000.
(exception for spouses of folks with earnings). And no,
interest, dividends, capital gains are not considered
earned income for this.


--
Plain Bread alone for e-mail, thanks. The rest gets trashed.
No HTML in E-Mail! -- http://www.expita.com/nomime.html
Are you posting responses that are easy for others to follow?
http://www.greenend.org.uk/rjk/2000/06/14/quoting

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.


Posted by Will Trice on March 25, 2008, 8:35 pm


BreadWithSpam@fractious.net wrote:
> sailor1x@hotmail.com writes:

>> Does interest and dividend income have any
>>effect on what I can contribute?


> you do have to have *earned* income
> in the year for which the contributions apply. So if your
> earnings for 2008 are $5000, you may contribute $5000.
> (exception for spouses of folks with earnings). And no,
> interest, dividends, capital gains are not considered
> earned income for this.

But interest, dividends, and capital gains can effect your eligibility
to make a contribution.

-Will

william dot trice at ngc dot com

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.


Posted by joetaxpayer on March 25, 2008, 8:10 am


sailor1x@hotmail.com wrote:
> If I retired in February 2008 and will only gross $5000 total income
> for the year, can I contribute $6000 to a Roth IRA and $5000 to a
> traditional IRA for 2008? Does interest and dividend income have any
> effect on what I can contribute? Do I understand the rules correctly
> that I cannot make contributions unless I am employed?
>
> DTW

?? I trust you are 50 or older. Your 2008 deposit limit is $6000 or
earned income, whichever is LESS.
So for you, $5000 is it.
The IRA limit is one limit for both types as a total, noone can deposit
$6000 + $6000 as an individual without penalties for overdepositing.
JOE

www.blog.joetaxpayer.com

--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.


Similar ThreadsPosted
Roth IRA contributions after retirement January 29, 2008, 4:50 pm
Scholarship/Fellowship funds for Roth IRA contributions July 19, 2007, 4:30 pm
What happens to Roth IRAs after $99K income level? April 17, 2007, 5:14 am
Gross or net income for Roth contribution April 8, 2008, 4:31 pm
529 contributions and withdrawals November 9, 2006, 11:17 am
Comingling pre-/post-tax contributions in IRAs? September 6, 2007, 12:56 pm
Formula for FV of non-interest-bearing account given annual contributions increase at x% compounded rate February 2, 2007, 1:25 pm
Which is a better place for income? April 9, 2007, 4:53 pm
What to do with disposable income... May 13, 2007, 6:31 am
How To Manage Low Income? May 15, 2007, 8:17 am

other essential online resources:
United States Treasury
US Securities and Exchange Commission
New York Stock Exchange
Tokyo Stock Exchange
Accounting and Tax Software Forums
Contact Us | Privacy Policy   XML SitemapXML Sitemap