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can anyone think of a way to convert some royalty income to earned so it can be placed in ROTH 403s or similar.

Royalty income is not earned income, and cannot be 'converted' to earned income. However, if the couple is employed and eligible for retirement plans through their employment, they can use royalty income for living expenses and contribute employment income to the retirement plans. Additionally, if there is earned income from employment, they can contribute to IRAs for each of them. The type of IRA (deductible, Roth, non-deductible) that they would be eligible to contribute to can be determined based on IRS Pub 590.

If there is no earned income, then the royalty income can always be invested in taxable accounts. Just because it doesn't say "IRA", "401(k)", "403(b)" or some other "retirement" designation doesn't mean that it can't be money for retirement. In fact, for many people, it's a good strategy to have at least some of their retirement money in taxable accounts, so that they can structure their retirement income to pay the least amount of tax possible.

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