Earned Income
QUESTION:
What is the minimum amount of earned income one must have to invest in a ROTH IRA?
BACKGROUND:
Contributing to an IRA since program inception in 1982, I retired ten years ago but have continued annual contributions since my wife was still working. Given my wife retired last year we no longer have earned income, just investment income via interest and dividends. Since IRA investments are important to me, what is the minimum amount of earned income I would need should I return to the work force in any capacity?
Permalink Submitted by Alan Spross on Tue, 2010-01-12 19:32
There is no minimum amount of earned income to contribute to an IRA. But you cannot contribute more than your earned income. Therefore, if you only make $1,000, then your IRA contribution is limited to that. Your maximum is 6,000 for age 50 and over, so if you make 6,000 you can make a full maximum contribution.
Your wife can also make a spousal contribution using your income, but both of you are limited to Roth IRA contributions if you have reached age 70.5.