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Roth IRA

By Terry Savage on November 21, 2022 | Financial Planning / Retirement

Greetings Terry, I’ve started drawing a military retirement at age 60. I’m still working civilian wise. I’m 61 , about 4 years from retirement . In addition to my other planning I would like to start a Roth is there an Eligibility process ?

Terry Says

First, you must have “earned income” — not income from a pension or investments — to contribute to a Roth. Sounds like you have that covered.

Second, you can’t have “too much” income. Here is the rule:
If you file taxes as a single person, your Modified Adjusted Gross Income (MAGI) must be under $144,000 for the tax year 2022 to contribute to a Roth IRA, and if you’re married and file jointly, your MAGI must be under 214,000 for the tax year 2022. The maximum total annual contribution for all your IRAs combined is:

$6,000 if you’re under age 50
$7,000 if you’re age 50 or older

And third, looks like you would be “eligible” for a $7,000 contribution — but you must have earned at least that much to be able to contribute the max. (If you earned only $5,000 from your civilian job, that’s all you could contribute!)

But I’m guessing based on your question and the above caveats that you can put away the full $7,000 in a Roth this year. Do it!!

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