Ask The Experts: Am I Eligible for a Roth IRA?
I have a traditional IRA to which I plan contribute the max of $5000. My wife left her job in April 2008 where she was enrolled 401(k). Is she eligible to open a Roth IRA? –Girish, OH
Since your wife had earned income in 2008, she is eligible to make an IRA contribution. This contribution must be made by your tax filing deadline of 4/15/09. Any person is allowed to contribute to a Roth IRA an amount equal to 100% of her income up to a maximum of $5,000 ($6,000 if she is over age 50). There is a caveat, though. You can only contribute the full $5,000 in 2008 as long as your income falls below $101,000 if you're single, and $159,000 if you're married filing a joint tax return. The contribution limit is then phased out incrementally if you make between $101,000 and $116,000 (single) or $159,000 and $169,000 (married-joint).
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Bill Losey, CFP®, CSA, America's Retirement Strategist®, is the resident retirement planning
expert on CNBC’s “On the Money”. He has been named one of America’s Top Financial Planners and is the author of Retire in a Weekend! The Baby Boomer’s Guide to Making Work Optional. He also publishes Retirement Intelligence, a free weekly award-winning newsletter. Bill can be reached online at www.MyRetirementSuccess.com.