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Greetings, Frentz, and welcome. You asked:

<<I recently accepted an early retirement package from Uncle Sam and am now employed by a small company that does not offer a retirement program. I received $25,000 from Uncle Sam to help compensate for the reduced retirement annuity I am receiving. I can contribute $2,000 to a regular IRA but how can I protect a larger portion of $25,000 from income taxes? Do I need to convince my new employer to open a SEP or SIMPLE IRA??>>

The early retirement incentive you received from Uncle Sammy is not a payment from a qualified retirement plan. Therefore, it may not be transferred into an IRA or into a new employer's plan. That means you will have to pay income taxes on that sum. The best you can do, and assuming you AGI supports the contribution, is put $2K based on your wages into a deductible traditional IRA and another $2K for your spouse. See the IRA discussion in my Foolish Retirement Plan Primer at http://www.fool.com/retirement for details. And yes, if you wish to defer more of your income, the only way you can do that is to convince your employer to establish a SEP-IRA, a SIMPLE, or some other type of retirement plan for that purpose.

Regards..Pixy
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