A:

Generally, for purposes of contributing to IRAs, 403(b)s and other retirement accounts, compensation is defined as income received in exchange for personal services. This does not include pension income.

If you are not eligible to contribute to an IRA or a qualified plan, you may consider other options such as tax-deferred annuities, investing your assets in a portfolio balanced to suit your financial profile, etc. You may want to contact your financial consultant to discuss the various options and determine which is best for you.

(For more information on saving for retirement visit Fundamentals of a Successful Savings Program, An Overview of Annuities, Managing Income During Retirement.)

This question was answered by Denise Appleby
(Contact Denise)

RELATED FAQS

  1. How does a pension income drawdown work?

    Understand what a pension income drawdown plan is, and learn the current rules governing pension income drawdown plans in ...
  2. What option strategies can I use to earn additional income when investing in the ...

    Discover how risk-averse investors need to build a retirement portfolio. The major factors are diversification and avoiding ...
  3. What is fiduciary liability insurance, and what are its benefits?

    Understand what fiduciary liability insurance is, what companies or individuals can benefit from having it, and when it is ...
  4. Why are insurance companies and pension funds considered financial instruments?

    Find out why insurance companies and pension funds are considered carriers of financial instruments, and what role they play ...
RELATED TERMS
  1. Current Service Benefit

    The amount of pension benefit accrued by an employee who had ...
  2. Benefits Payable Exclusion

    An insurance policy exclusion that removes the insurer’s responsibility ...
  3. Self Invested Personal Pension (SIPP)

    A tax-efficient retirement savings account available in Great ...
  4. Senior Move Manager

    Senior move managers (SMMs) help seniors downsize and relocate ...
  5. Elder Care

    Elder care, sometimes called elderly care, refers to services ...
  6. Gold IRA

    Definition of Gold IRA

You May Also Like

Related Articles
  1. Professionals

    5 Signs That You Have a Lousy 401(k) ...

  2. Entrepreneurship

    Why Small Business Owners Need Financial ...

  3. Savings

    Investing: How to Make Fast Money in ...

  4. Professionals

    How the Robo-Advisors Differ (& How ...

  5. Professionals

    Target Date Funds: More Popular, Cheaper ...

Trading Center