A 45-year-old employment counselor has a Keogh plan for himself and three full-time employees who have been working for him for the past four years. If he earns $150,000 this year and contributes the maximum amount allowed to his Keogh plan, how much may he invest in an IRA?
A) He may not have an IRA.
B) He may have an IRA but may not make a contribution for this year.
C) He may contribute 100% of earned income or the maximum allowable IRA limit, whichever is less.
D) He may invest any amount up to 100% of his earned income.
Answer: C