My father has been retired from his regular job for years, but he still works part time selling real estate. This produced self-employment income of $7,240 last year. Since both parents are over 50 (they're 75), they will each contribute $3,500 to a Roth, for a grand total of $7,000. (My mother doesn't work, so her contribution is being made based on his income.) Now for my question: How much can he contribute to his SEP-IRA? I assume the maximum would be $240, since when added to their Roth contributions this totals $7,240, his total earned income for the year. I'd strongly suspect that the IRS doesn't allow one to make contributions to retirement plans that exceed their earned income. Thank you in advance for taking the time to answer my question.
- posted
19 years ago
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