Pensions are not eligible for rollover or contributions to an IRA.
For 2015, 2016, 2017 and 2018, your total contributions to all of your traditional and Roth IRAs cannot be more than:
- $5,500 ($6,500 if you’re age 50 or older), or
- your taxable compensation for the year, if your compensation was less than this dollar limit.
(Taxable compensation is generally wages that you worked for - W-2 or net self-employed income minus the deducible part of the SE tax, but can include commissions, alimony and separate maintenance, and nontaxable combat pay ).
Unless you have as least as much taxable compensation as the contribution, the contribution would be an excess contribution, subject to a 6% penalty that repeats each year until removed.
If it is an excess contribution then you should tell the IRA custodian and have them return the excess as a "return of contribution", not as a Norma distribution.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
