Can I work part time after I retire and continue to contribute
to my Roth IRA?
To contribute to any kind of IRA, you must have
earned income. Earned income means either wages
(line 7 of Form 1040), self-employment income
(either from a sole proprietorship --Schedule
C, or farming -- Schedule F), a partnership (Schedule
E, Page 2) or alimony.
contribution to any kind of IRA is limited to the lesser of:
- $4,000 ($5,000 if you are age
50 before the end of the year).
net earned income
Unlike a traditional IRA, you can continue
to contribute to a Roth IRA at any age. Also, unlike a traditional IRA, you don't
have to commence required minimum distributions from a Roth IRA when you turn
70½ years old.
If you don't have a pension plan at
work, you can contribute to a traditional IRA regardless of your income. With
a Roth IRA, you can only contribute if your modified adjusted gross income is
less than certain amounts that differ depending on your filing status.
2007, your Roth IRA contribution limit is reduced, or phased out, in the following
- Your filing status is married filing
jointly or qualifying widow(er) and your modified AGI is at least $156,000. You
can't make a Roth IRA contribution if your modified AGI is $166,000 or more.
Your filing status is married filing separately, you lived with your spouse at
any time during the year and your modified AGI is more than zero. You can't make
a Roth IRA contribution if your modified AGI is $10,000 or more.
Your filing situation is different than either of those described above and your
modified AGI is at least $99,000. You can't make a Roth IRA contribution if your
modified AGI is $114,000 or more.
If you continue to
work after retirement, you can contribute to a Roth IRA so long as you have earned
income and your modified AGI is below the thresholds.