Question

"An individual, age 68, is retired and receives $48,000 in pension payments. To supplement this income, he works part-time at the local Wal-Mart", earning an additional $5,000 per year. How much can this person contribute to a Traditional IRA

Answer 1

Answer:

$5,000

Explanation:

Since you can contribute to a traditional IRA account until you are 70, this man can contribute up to $5,000 per year.

A retired person can contribute up to $5,500 to the IRA account if he/she was below age 50, if the person is above 50 years old, then they can contribute up to $6,500 of the work compensation. If their work compensation is lower (like this case), then the individual can contribute his whole salary.