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For the last 6 years I've worked in a very small company with a profit-sharing pension plan. All contributions are made only by our employer. Turns out after 6 years I am fully vested but my share is less than $5,000. I am 38 and obviously need to get started on my own retirement savings plan. I'm told that I am not eligible for a tax exempt IRA/401K plan because I have this worthless pension plan. Can I get out of that plan now, can I have my employer roll this over into my own IRA and then be eligible to contribute my own pre-tax dollars?
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It's very difficult to elect not to be a participant in a qualified plan. The taxing / labor authorities think the employer is squeezing you out, consequently the employer usually doesn't want to attempt it even if you want out. I assume you are over the income threshold for the deductible IRA. This leaves you with the ROTH IRA. Assuming you are not over that threshold you can contribute $2,000. It's not deductible but the earnings are never taxed if you follow the rules.

BTW, you should talk to your employer about trashing the existing plan and going with a SEP IRA. They are very cost effective and allow the employee to elect to defer income as in a 401(k). My vague recollection is that each employee can put up to $6,000 per year into plan. Pixy probably knows this off the top of his head.
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You can ask your employer to add a 401(k) option onto the existing PS plan. Then you can contribute Pre-Tax to this part of the Plan.

If the employer agrees to a matching contribution of just 3-4% of you pay, then the IRS will call it a "Safe-Harbor" 401(k) Plan and the boss can contribute a large percentage regardless of how little the "Nonhighly compensated" employees contribute.

Good luck!
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