Can you contribute when receiving a pension?

[Guest gzwick04]

Is someone aloowed to contribute to a Roth Ira when receiving a pension? His wife works and makes enough wages to be able to contribute for the both of them. The amount between the wages earned and the pension does not exceed the maximum amount of wages allowed. Thank you.

[John G]

In your situation, the max Roth contribution will be based upon the wife's "earned income". For example, if she earns over 8,000 then you both could contribute 4k.

[Guest gzwick04]

Thank you for your reply. His wife makes much more than the $8,000 a year. Also, both of them are also able to contribute an extra $500 I belive because of their ages. I wanted to make sure that the fact that the husband receives a pension wouldn't afeect his ability to contribute. Thank you.

[Guest andyr]

When it comes to a Roth IRA, the "active participant" limitations do not apply----it does not matter that you are participating in a pension plan or receiving payments from it.

Restrictions to Roth contributions are based on what you earn. First you must earn enough to make a contribution, but not so much that you are prevented from making any contribution at all. The phase outs for making Roth contributions, unless they've changed recently, are between $95,000 and $110,000 for single filers and between $150,000 and $160,000 for married filing jointly. By the way, amounts received from a qualified plan (pension payments) are not earnings for purposes of Roth or Traditional IRA contributions.