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I recieve a monthly disability retirement annuity (taxed) that is reported on a 1099, along with other small investments that also report via Form 1099. I have been told I cannot open an IRA of any kind because I do not receive a W-2 wage earning statement. Is there anything comparable to an IRA that I can do with my money for tax purposes or is it true that since I am receiving a "disability retirement annuity" I cannot invest tax-exempt in retirement?
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The easiest way to qualify for an IRA is to come up with a part time job that earns more than $3K per year.

Alternatively, look into LTBH (long term buy and hold) in a taxable account. By selecting investments that can be held long term and that pay small dividends or qualified low tax dividends, you minimize your income taxes. Identifying investments you can truely hold long term can be the tricky part. But one of the good ones is an S&P 500 Index fund. Tax managed mutual funds also work well as do various growth stocks.

Best of luck to you.
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rcassels,

Keep an eye on the LSA proposal (www.lifetimesavingsaccount.com). If it gets passed, it may work for you. I haven't read up on the proposal this year, but last year when it was proposed there were no income or age requirements. That means it would also work for kids with no official income.

The proposal is basically to create a "savings account" similar to a ROTH IRA (tax exempt). There would be restrictions on when/why you could withdraw from it, and the current proposal is for a $5000 annual contribution limit.

Or better yet, instead of just watching to see if it is passed, write your senators/reps and tell them your situation. Let them know how much it would help you!

-Joe
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Get married. Or stay married, and have your spouse contribute with earned income.

Doug
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