Simply put, anyone can open a Roth IRA provided they meet the following guidelines:

1. You must have earned income from employment.
2. Your income must not exceed $114,000 per year if you file single on
   your federal income tax return, and $166,000 if you file married
   jointly.

These are the two basic requirements to meet in order to open and be eligible to make contributions to a Roth IRA. Note, the income restrictions listed are as of 2007. Each year the income guidelines change, so in 2008 the income limit will be stretched a little higher.

1. What if I'm 73, can I still open a Roth IRA?

   Absolutely. There is no age restriction for opening a Roth IRA. As long as
   you have earned income that falls below a certain level, you can open and
   contribute to a Roth account.

2. How do I determine my earned income? Is it gross income or net income?

   Actually, the income used to determine your eligibility is what's called your
   modified adjusted gross income or MAGI. A rough estimate or your MAGI can be
   found by adding together your AGI (line 38 on a 1040) and certain tax deductions
   (See IRS publication 590).

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   Once you've calculated your MAGI, you will better know if you are eligible to
   contribute and whether or not you may make a partial contribution or the full
   amount of $4000.

3. My financial planner told me I could not contribute the full amount of $4,000 to
   my Roth IRA. Why is that?

   Well, there are a number of factors that could lower your allowable
   contributions.

   • For instance, the amount you contribute to a traditional IRA will lower the a
     allowable contribution to a Roth IRA. The maximum contribution of $4,000 per year applies to all of your IRAs combined (not including SEP or SIMPLE IRAs).

   So if you contribute $2,000 to a traditional IRA you will only be permitted to
   contribute $2,000 to your Roth IRA.

   More on this topic

   • Rollover of IRA Accounts
   • The Benefits of a 401(k)
   • Roth IRA 101
   • Another reason you may not be eligible to make the full Roth IRA contribution
     is due to your modified AGI. The amount you may contribute begins to phase out
     when your MAGI reaches a certain level. Your income tax filing status also
     plays a role.
   • Filing Single:
     Full contribution allowed if your income is below $99,000
     Partial contribution if your income is between $99,000-$114,000
   • Married, Filing Joint:
     Full allowed contribution if your income is below $156,000
     Partial contribution if your income is between $156,000-166,000
   1. What if I file married but a separate return?

      In this case, if you lived with your spouse anytime during the year for which you
      are filing, your income cannot exceed $10,000 in order to make any contributions
      to a Roth IRA.

      However, if you did not live with your spouse anytime during the year, then you
      will be treated as if you filed single on your return and be held to the same
      income restrictions mentioned above.

   2. Can my wife and I both contribute $4,000?

   Yes. Each of you may contribute $4,000 per year, for a total of $8,000. The
   amount you may contribute to a Roth IRA is determined individually based on your
   separate incomes. However, if your wife does not work, you may still be
   able to make contributions for her.