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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 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.

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