Retirement and IRA's

[Guest devils30]

Just a general question. I am retired and i recive a pension. Can I open an IRA? My account said I can't because i collect a pension. I am sorry but I dont understand Can anyone help with this question?

[JAY21]

It depends on if you have any earned income (i.e., income from current work not from pension plans). If you have current earned income from say a part-time job (no matter how small) then you can make an IRA contribution up to the lesser of (a) the earned income amount or (b) the IRA contribution limit for the year (including catch-up if over age 50). Perhaps the problem your accountant is referring to is if all your income is "passive" income from investments and pensions but no current working income.

If you do have earned income from a current job then if you are not earning any additional pension benefits (e.g., maybe because part-time employment doesn't qualify for additional service credits) then you should be able to deduct the IRA as well. If you're earning new pension service credits then the IRA may not be deductible depending on your income level.

I suspect the main issue issue is that you have no current income from a job since you're retired.

[Guest devils30]

It depends on if you have any earned income (i.e., income from current work not from pension plans). If you have current earned income from say a part-time job (no matter how small) then you can make an IRA contribution up to the lesser of (a) the earned income amount or (b) the IRA contribution limit for the year (including catch-up if over age 50). Perhaps the problem your accountant is referring to is if all your income is "passive" income from investments and pensions but no current working income.

If you do have earned income from a current job then if you are not earning any additional pension benefits (e.g., maybe because part-time employment doesn't qualify for additional service credits) then you should be able to deduct the IRA as well. If you're earning new pension service credits then the IRA may not be deductible depending on your income level.

I suspect the main issue issue is that you have no current income from a job since you're retired.

I currently work a part time job. Thank you for the info

[txdd]

Also, no traditional IRA contributions allowed for year in which you reach age 70 1/2 and later years.

Roth IRA contributions still OK.