<p>I was fortunate to have earned a scholarship that covers tuition, as well as room and board. I was thinking about opening an IRA but don't currently have any income that would allow me to contribute. Does a scholarship that covers room and board, which make it a taxable scholarship, qualify as earned income? Thanks!</p>
<p>Hmm…good question. Your scholarship for room/board is taxable income, but I’m not sure it’s earned income. I say this because I believe at the end of the year you will get a 1098T (or is it a 1099T??) from your university for this money awarded to you…not a W-2 form (for employees of others) or a 1099 (for self employed income). </p>
<p>But yours is a good question. </p>
<p>Congratulations on your great scholarship! But I have to ask…why don’t you have a summer job?</p>
<p>No, you cannot open an IRA based on this income. We tried same on son’s IRS form and it wasn’t allowed. </p>
<p>This really creates problems because if you continue on into grad school in this manner then your retirement savings are held off for a decade and missing those 8 years will really hurt your future.</p>
<p>Try to get a job.</p>
<p>[Retirement</a> Calculator: When should I begin saving for retirement? Yahoo! Personal Finance](<a href=“http://finance.yahoo.com/calculator/retirement/ret-07]Retirement”>http://finance.yahoo.com/calculator/retirement/ret-07)</p>
<p>If you put 5000 yr. in Roth IRA now you will have 2,200,000 at age 65. If you wait 8 yrs. and start you will have 1,100,000 at age 65..</p>
<p>hmm..that’s kind of what I thought..thanks for the info</p>