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Retirement Planning

Earned Income

Income is a crucial concept in the world of finance. It refers to the financial return one receives for their physical or mental efforts and activities. This encompasses both wages or salary earned from employment, as well as net earnings from self-employment. However, it is important to note that passive income, such as interest, dividends, or capital gains, are not considered as part of one's income. This is a crucial distinction to keep in mind, especially when it comes to contributing to a traditional or Roth IRA. To be eligible for these retirement accounts, there must be earned income present. This means that either you or your spouse must have received income from active participation in a job or business.
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