sailor1x@[EMAIL PROTECTED]
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.
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