Roth IRA after 65

[Guest Patricia Krug]

I am 65, collecting Social Security but have a part time job. I made approximately $5,000 in 2002. Can I take out the Roth IRA for 2002. If yes, may my husband, who is 73, take one out also?

thanks

[Guest m robinett]

[Appleby]

Yes. You may make a participant contribution to a Roth IRA for tax year 2002. You may also make a contribution for your spouse, if he has no earned income- this is referred to as a spousal IRA contribution. Certain requirements must be met in order for your to be eligible to make a spousal IRA contribution, for example, you must file a joint income tax return. If he has income, he may make a contribution for himself. The contribution limit for each person, you and your husband, is $3,500 ($3,000 plus $500 catch-up contribution because you are at least age 50).

The total contribution, for you and your spouse, cannot exceed your total Modified adjusted gross income.

Refer to the following link for more information. http://www.irs.gov/formspubs/page/0,,id=10...233,00.html#T80

[MGB]

Appleby,

(Too lazy to look up the rule, so I'll ask.)

You cannot contribute to a regular IRA after age 70-1/2. Do they allow such contributions to a Roth? (The husband is over 70-1/2.)

[Appleby]

Hi MGB-

Yes. There is no age restriction for contributions to Roth IRA… another one of its attractive features , when compared with the traditional IRA.

There is also no required minimum distribution for the Roth IRA owner… unlike the Traditional IRA , where the IRA owner is required to begin distributions effective the year he/she attains age 70 ½ .

However, post death ( of the Roth IRA owner)RMD rules do apply to the beneficiaries

[Guest mcdonnell]

RE: Appleby's statement, "The total contribution, for you and your spouse, cannot exceed your total Modified adjusted gross income"

Patricia, The total contribution for you and your spouse cannot exceed your total combined compensation (from working). If your husband does not have compensation from working, then the total of the combined contributions for the 2 of you is limited to your $5,000 of compensation (also assuming you are eligible because your Modified Adjusted Gross Income is less than $150,000).

[Appleby]

Patricia,

I sent you some additional information via e-mail. I hope it helps.

Mcdonnell is right. The maximum amount you may contribute to a Roth IRA is 100 percent of your compensation (or income) or $3,500, whichever is less. For taxpayers who are not at least age 50 by the end of the year for which the contribution is being made, the contribution limit is $3,000 not $3,500.

Your Modified Adjusted Gross Income (MAGI) is used to determine if you are eligible to make a regular participant contribution to a Roth IRA. As I mentioned in the additional material I send to you, while there is no cap on the amount of compensation you may earn in order to be eligible to make a contribution to a Traditional IRA, it is not so for Roth IRAs. If you are married and file a joint tax return, you may not make a regular Roth IRA contribution if your MAGI is more than $160,000. The $3,500 limit is reduced when your MAGI is between $150,000 and $160,000.

The range for single taxpayers is $95,000 and $110,000. Those with MAGI over $110,000 may not make a contribution to a Roth IRA.

...and for married individuals who file separate returns, the range is $0 and $10,000.

Remember that contributions for 2002 must be made by April 15,2003. If your contribution is mailed by April 15,2003 and reached your IRA custodian/trustee after April 15,2003, the IRS considers the contribution as having been made by April 15,2003.