Four single individuals Donald , Bernie, Kamala and Warren come into your office seeking your sage advice and financial wisdom .
Donald, age 63 has no job and is living off his substantial stock and bond portfolio which gives him $50,000 of annual interest and dividend income.
Berni, age 68 works as a CPA and has a salary of $250,000 with no retirement plan
Kamala, age 35 is an attorney with a salary of $50,000 with a 401(k) Defined Contribution Plan.
Warren, age 45 is a CEO making $250,000 and a Defined Benefit pension plan.
a) Which of these four can make a maximum contribution to a Traditional IRA? How much is that contribution for each?
b) Which of these four can get a full tax deduction for their traditional IRA contribution?
c) Which of these four can make a maximum contribution to a Roth IRA?
d) Which of these four can get a full tax deduction for their Roth IRA contribution?