Skip to main content
No. of Recommendations: 1
My question is, can I still contribute up to the annual limit into my 401k for 2006 even though I am no longer employed at that company? I will not be eligible to contribute into my new employers 401k plan until the summer of 2007, so if I can't contribute into my old plan for 2006, I will miss out on the contribution and also on the tax savings that goes with it. And because of the job change, we relocated mid-year 2006 and my wife had not contributed up to her max into her SIMPLE IRA at her old job. Can she still contribute up to her max as well for 2006, even though she no longer works at her old employer?


Sorry, you are out of luck with both the 401(k) and SIMPLE IRA contributions.....Both plans are salary reduction plans, so contributions are required to come out of your paycheck during the tax year. Since it is now 2007, it is too late to contribute for 2006, even if you were still employed by the companies.

And if we can't contribute to the 401k and/or SIMPLE any more for 2006, are we precluded from contributing to a standard IRA for 2006 (because we were each "officially" covered by a company retirement plan, even though mine was only for 5 days of 2006)???

As long as you have earned income of at least your contribution amount, you are allowed to contribute to a traditional IRA - the question is, will the contribution be deductible? The rule says, for MFJ, that if you or your spouse were covered by a retirement plan at any time during the tax year, you may make a fully deductible contribution if your MAGI is $70k or less; a partially deductible contribution if your MAGI is more than $70k and up to $80k, and a non-deductible contribution if your MAGI is more than $80k. See IRS Publication 590 ( http://www.irs.gov/pub/irs-pdf/p590.pdf ) for details.

AJ
Print the post  

Announcements

The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.