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. When can benefits be received from a provident fund?

    Find out when participants in provident funds can begin receiving benefits, including how funds can be used to finance important ...
  2. Is Social Security Income a perpetuity?

    Find out why Social Security income is not classified as a perpetuity, including what constitutes a perpetuity and the basics ...
  3. What types of investments are allowed in a provident fund?

    Read about the types of investments allowed in various provident funds around the world, including the Indian, Malaysian ...
  4. How does a provident fund compare to U.S. Social Security?

    Find out how provident funds compare to the U.S. Social Security program, including examples of income limits and contribution ...
RELATED TERMS
  1. See-Through Trust

    A trust that is treated as the beneficiary of an individual retirement ...
  2. Backdoor Roth IRA

    A method that taxpayers can use to place retirement savings in ...
  3. Current Service Benefit

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

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

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

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

You May Also Like

Related Articles
  1. Retirement

    Does it Make Sense to Have an MLP in ...

  2. Stock Analysis

    When Will Google Get Its Mojo Back?

  3. Retirement

    Top Tips for Rebalancing 401(k) Assets

  4. Professionals

    Few Target-Date Managers Invest in Their ...

  5. Fundamental Analysis

    Should You Hire an Advisor or DIY Your ...

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!