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I have a question on Roth IRA's:

I would like to contribute to my Roth IRA in January of next year, but won't be working until October of next year. Is this OK to do if I have the money, or do I need to earn the money before contributing?

Also on this note, I would like to convert a traditional IRA to a Roth IRA. I have the money to pay the taxes, but does that money need to be earned income?

Thanks,

svmandolin
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Svmandolin asks:

<<I would like to contribute to my Roth IRA in January of next year, but won't be working until October of next year. Is this OK to do if I have the money, or do I need to earn the money before contributing?>>

All that counts is that you have the necessary earned income for the year in which you earn the contribution. Thus, you may contribute $2K in January even if you don't earn that $2K until December. Just make sure, though, you earn enough at some point in the year to cover that contribution. :-)

Regards..Pixy

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Svmandolin asks:

<<I would like to contribute to my Roth IRA in January of next year, but won't be working until October of next year. Is this OK to do if I have the money, or do I need to earn the money before contributing?>>

All that counts is that you have the necessary earned income for the year in which you earn the contribution. Thus, you may contribute $2K in January even if you don't earn that $2K until December. Just make sure, though, you earn enough at some point in the year to cover that contribution. :-)

<<Also on this note, I would like to convert a traditional IRA to a Roth IRA. I have the money to pay the taxes, but does that money need to be earned income?>>

No, you don't have to have earned income to convert an existing traditional IRA to a Roth IRA. All that's required to do that is to have a modified Adjusted Gross Income that does not exceed $100K in the year exclusive of the amount to be converted.

Regards..Pixy

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