Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (7) | Ignore Thread Prev Thread | Next Thread
Author: stockmover Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: IRA Contributions Date: 3/11/2006 4:36 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I am going to be receiving my monthly pension benefits starting in May 2006 from a qualified retirement plan. Does this mean that I will no longer able to contribute any money to my existing IRA account because I am covered by a Qualified Pension Plan?
Thank you for your advice.

TG
Print the post Back To Top
Author: stockmover Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 84836 of 121061
Subject: Re: IRA Contributions Date: 3/11/2006 5:06 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I am going to be receiving my monthly pension benefits starting in May 2006 from a qualified retirement plan. Does this mean that I will no longer able to contribute any money to my existing IRA account because I am covered by a Qualified Pension Plan?
Thank you for your advice.

TG

I should add that I am talking about my IRA Contribution for tax year 2006 and my filing status is married filing separately. Also my wife does not live with me. Thanks again fools for your help.

TG

Print the post Back To Top
Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 84838 of 121061
Subject: Re: IRA Contributions Date: 3/11/2006 6:47 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
I am going to be receiving my monthly pension benefits starting in May 2006 from a qualified retirement plan. Does this mean that I will no longer able to contribute any money to my existing IRA account because I am covered by a Qualified Pension Plan?

You've gotten some wires crossed somewhere. Whether or not you are covered by a retirement plan at work determines whether you are subject to the AGI phaseouts for deducting traditional IRA contributions. Receiving a pension from a former employer does not constitute being covered by a plan.

As for making IRA contributions, you can do so even if you're receiving a pension, but you must have earned income. Pensions are not earned income.

So, assuming you're still working as of now:

2006: You can make an IRA contribution based on your earnings. Deductibility is subject to AGI phaseouts since you have been covered by a plan at some time during the year.

2007: If you have earned income you can make an IRA contribution. If you are not covered by a retirement plan at that job, you can deduct your traditional IRA contribution.

Details are in IRS Publication 590.

Phil

Print the post Back To Top
Author: jrr7 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 84840 of 121061
Subject: Re: IRA Contributions Date: 3/11/2006 10:16 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
I am covered by a Qualified Pension Plan?

You're not covered. Covered in this sense means "eligible to contribute to" or "the employer is contributing on your behalf"

Print the post Back To Top
Author: stockmover Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 84897 of 121061
Subject: Re: IRA Contributions Date: 3/13/2006 5:39 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Dear Phil
I should have mentioned that I am totally disabled and have been receiving Social Security Disability Benefits as well as Long Term Disability Payments from my former employer since 1989. I do not contribute any monies to my former employers plan and have not contributed any monies since 1989 when I became elegible for LTD Benefits. The LTD Benefits have been taxable by both the Feds and the State. However I was notified by my emplyer that my LTD benefits will automatically terminate when I am 62 years of age in May 2006 and I will be forced to take early retirement and thus start receiving taxable retirement benefits. Does this in any way change my elegibility for my 2006 IRA contribution?

I sincerely appreciate your help Phil.

TG

Print the post Back To Top
Author: TMFPMarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 84898 of 121061
Subject: Re: IRA Contributions Date: 3/13/2006 7:11 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
I should have mentioned that I am totally disabled and have been receiving Social Security Disability Benefits as well as Long Term Disability Payments from my former employer since 1989. I do not contribute any monies to my former employers plan and have not contributed any monies since 1989 when I became elegible for LTD Benefits. The LTD Benefits have been taxable by both the Feds and the State. However I was notified by my emplyer that my LTD benefits will automatically terminate when I am 62 years of age in May 2006 and I will be forced to take early retirement and thus start receiving taxable retirement benefits. Does this in any way change my elegibility for my 2006 IRA contribution?

No. Long-term disability payments are reported as wages until you reach retirement age. Thus, they can be the basis for an IRA contribution.

This additional fact does change my original answer about being covered by a plan. You haven't been since 1990.

Phil

Print the post Back To Top
Author: stockmover Big red star, 1000 posts Old School Fool CAPS All Star Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 85024 of 121061
Subject: Re: IRA Contributions Date: 3/15/2006 3:58 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 0
Thank you Phil. I appreciate your help.

TG

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (7) | Ignore Thread Prev Thread | Next Thread
Advertisement