Professor’s income qualifying income for Roth IRA?
Our client is an officially retired professor who is receiving his full annual salary for 5 years after his retirement as part of his ‘early retirement incentive’. He receives a W-2 and the income is listed as salary/wages. Does this income qualify him to contribute to a Roth IRA?
I saw the rules do not allow ‘deferred income’ but this does not exactly meet the definition of ‘deferred income’. It seems to be simply an extension of his salary.
Your help, thoughts and references would be greatly appreciated!
Carol Hoffman
Clear Perspectives Financial Planning
Permalink Submitted by Alan Spross on Wed, 2010-01-20 23:19
There is a “safe harbor” in existence for determining taxable compensation for an IRA contribution. It consists of W-2 Box 1 income less any amount shown in Box 11. Sounds like he might qualify under that safe harbor. (Ref Pub 590, p 8 in the 08 edition).