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Author: jlmanatee Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75650  
Subject: IRAs and Company Pension Plans Date: 8/23/1999 8:51 PM
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No matter how many times I read the excellent Motley Fool IRA articles, I never quite understand one issue. The articles state that I cannot contribute to a traditional deductable IRA if I'm a participant in my company's retirement plan and my AGI is over $40K.
My company provides me with a pension plan, but it is not one in which I may make contributions. We also have no 401K plans or the like, I'm single and my AGI is over $40K Does this make me a participant (in a qualified retirement plan) and therefore unable to invest in a traditional deductable IRA?
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Author: Bob78164 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: 13384 of 75650
Subject: Re: IRAs and Company Pension Plans Date: 8/23/1999 9:10 PM
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jlmanatee writes (in part):

My company provides me with a pension plan, but it is not one in which I may make contributions. We also have no 401K plans or the like, I'm single and my AGI is over $40K Does this make me a participant (in a qualified retirement plan) and therefore unable to invest in a traditional deductable IRA?

I reply:

It sounds like you have a defined benefit plan (as opposed to a defined contribution plan). If so, then you cannot deduct an IRA contribution, and your options are a non-deductible traditional IRA and a Roth IRA (assuming that you don't make more than the $95,000-$110,000 single, $150,000-$160,000 married, phase-out range for a Roth). Obviously, if these are your choices, the Roth IRA is the way to go. --Bob

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