Questions and Answers

Can an individual 78 years of age who has earned income contribute to a Roth IRA while taking distributions from a traditional IRA?

Yes. There is no age restriction for making a regular Roth contribution. The only eligibility criteria are having compensation and modified adjusted gross income (MAGI) within the limits. Traditional IRA distributions, including required minimum distributions, are not compensation for contribution purposes, so such an individual must have wages, tips, salary, etc. in order to make a Roth IRA contribution. For 2007, the MAGI limits are:

Roth IRA Eligibility MAGI Thresholds

Filing Status

Tax Year

Full Contribution

Partial Contribution

No Contribution

Single

2006

<= $95,000

Between
$95,000 and $110,000

>= $110,000

2007

<= $99,000

Between
$99,000 and $114,000

>= $114,000

Married, Joint

2006

<= $150,000

Between
$150,000 and $160,000

>= $160,000

2007

<= $156,000

Between
$156,000 and $166,000

>= $166,000

Married, Separate

2006

N/A

< $10,000

>= $10,000

2007

N/A

< $10,000

>= $10,000

IRA owners should address compensation and MAGI questions to their tax professionals.

(Posted: 07/11/2007)