Roth Ira contributions.

[Guest macaroo]

Can a Roth IRA contribution be made this year using earned income from past years of employment if person is now retired and not employed?

[WDIK]

According to IRS Publication 590, the contribution limit to a Roth IRA for 2005 is the lesser of:

$4,000; or

your taxable compensation for the year.

[John G]

The answer to your question is NO. You can't qualify for a contributory Roth based upon prior year earnings, only current year earnings count. [Revised comment: Your contribution is made for a specific calendar year based upon the earnings in that calendar year. The only time you can make a contribution outside of the calendar year of your earnings is in the first few months in the following year while the IRA window for the year before is still open]

You may be able to convert your IRA accounts to a Roth. Conversion is not always desireable, it often takes a modest spreadsheet to do the math and you need to make a lot of assumptions about future tax rates, lifetimes, etc. Also, there are income thresholds (based upon your filing status) for conversions and taxes immediately due on the converted amount.

[Guest macaroo]

THANK YOU, John G.!