Can I fund a Traditional IRA, a 403(b) or a Roth IRA using pension money? I'm 56 years old. What limits apply if I can?

By Denise Appleby AAA
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. Does it make sense to convert a Traditional IRA to a Roth when the market’s down?

    If your modified adjusted gross income (MAGI) is $100,000 or less and you are not married filing separately, you may initiate ...
  2. Can I roll a Traditional IRA into a 529 college account for my grandchild?

    A 529 plan, also known as a "qualified tuition program", is an investment vehicle that allows individuals to save for education ...
  3. Can I still set up an SEP if one of my employees refuses to participate?

    You can establish the SEP IRA, even if the employee refuses to participant. However, you would need to establish an IRA for ...
  4. I want to close my IRA account. What percentage will I lose to tax?

    You can move the amount by means of a trustee-to-trustee transfer to another IRA, or roll over the amount to your 401(k). ...
RELATED TERMS
  1. Gold IRA

    Definition of Gold IRA
  2. Eligible Transfer

    An IRS-allowed movement of assets into or out of an individual ...
  3. Pension Risk Transfer

    When a defined benefit pension provider offloads some or all ...
  4. Death Master File (DMF)

    Also known as Social Security Death Index. A list of people whose ...
  5. Leveraged Benefits

    The use – by a business owner or professional practitioner – ...
  6. Peri-Retirement

    A term for the period of time leading up to actual retirement. ...
comments powered by Disqus
Related Articles
  1. Impact Of Continuing To Work In Retirement ...
    Retirement

    Impact Of Continuing To Work In Retirement ...

  2. Independent 401(K): A Top Retirement ...
    Retirement

    Independent 401(K): A Top Retirement ...

  3. After-Tax Balance Rules For Retirement ...
    Taxes

    After-Tax Balance Rules For Retirement ...

  4. Guide To 401(k) And IRA Rollovers
    Retirement

    Guide To 401(k) And IRA Rollovers

  5. Should You Convert Your IRA?
    Retirement

    Should You Convert Your IRA?

Trading Center