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Meowiz asked:

<<My husband, age 56, receives a fed. retirement annuity, and also had some separate self-employment income at end of l998. Can he contribute to an IRA or Roth IRA only with income from the self-employment income? This income was less than 2K ......
Can you use income from a pension to contribute to an IRA? >>

To JAFO's fine response to that question, she then asked:

<<I've read that if one spouse is not working, the other one may contribute to an IRA for them, for a total of max. 4K between the two IRA's. Can I contribute toward my husband's IRA for max of 4K between our two IRA's for one year, even though he is receiving self-employment income and is not technically unemployed.<<snip>> ....anyway, since it's 'our' money, can my income be used toward his 2K max? >>

Chris (aka SnootFool) handled that one. You now know that contributions to any IRA must come from earned compensation (i.e., income from employment) and that a retirement annuity doesn't count as compensation for that purpose. You also know that as long as one of you has at least $4K in earned compensation, then both of you may contribute up to $2K each to your own IRAs. Depending on AGI limitations and coverage by SEP/Keogh/SIMPLE for both of you, those contributions may or may not be deductible if made to a traditional IRA. They will not be deductible if made to a Roth IRA, but that, too, has AGI limits. Regardless, both of you can use the nondeductible traditional IRA. See IRS Publication 590, Individual Retirement Arrangements, for details. That can be found at . Alternatively, you can see my IRA discussion in the Foolish Retirement Plan Primer at .

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