Roth IRA and earnings Q?


J

JJ

Hi all.

I'm planning an early retirement for next year but would still like to work
long enough to fund a Roth IRA for my wife and myself. She is already
retired. I have to work into February 2008 to collect the company
contribution for my 2006 401-K. If you're not on the payroll, you lose it,
even though you worked the entire previous year! The company only makes
their contribution annually, sometime in mid-February.
I thought I might as well work a little longer and fund the Roth IRAs for
both of us, but I don't want to work any longer than necessary. 37 years at
the same place is enough!
Here's the questions:
Since the 2008 Roth IRA limit is $6,000, I have to earn $12,000 to fully
fund both, correct? We are both over age 50.
Which earnings is used for the funding calculation? Gross or Pre-Tax
earnings? I will continue to fund my 401-K and HSA health account while I'm
working, which are both pre-tax and reduce my gross earnings. Do I have to
hit $12,000 in gross or pre-tax?
Am I seeing the big picture and using the correct logic? I know if I worked
to the end of 08 it would help SS and defer tapping into my savings, but
other than that, any advantages to staying longer?

Thanks in advance!
Joe
 

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