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Level 2
posted Jun 1, 2019 12:05:47 AM

At age 65 wife was downsized in Jun 2016. She had a 401K plan, and contributed through her termination date - can she now open an IRA against monies earned after June?

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1 Best answer
New Member
Jun 1, 2019 12:05:49 AM

Possibly.  There are limits on the tax deduction for IRA contributions that apply to taxpayers who have a retirement plan at work.  Even though she wasn't with her employer for all of 2016, the limits still apply for the entire year.  Please follow this link for more information.   https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-li...

Keep in mind that a Roth IRA may also be an option for you.

4 Replies
New Member
Jun 1, 2019 12:05:49 AM

Possibly.  There are limits on the tax deduction for IRA contributions that apply to taxpayers who have a retirement plan at work.  Even though she wasn't with her employer for all of 2016, the limits still apply for the entire year.  Please follow this link for more information.   https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-li...

Keep in mind that a Roth IRA may also be an option for you.

Level 2
Jun 1, 2019 12:05:51 AM

Thank you so veyt much!

Level 2
Jun 1, 2019 12:05:53 AM

If I understand correctly - by June she contributed roughly $2400, and at age 65, she was entitled to contribute $6500, so if she wanted to open an IRA she would be allowed another $4100?  Thanks.

New Member
Jun 1, 2019 12:05:54 AM

I'm afraid it's more complicated than that.  The deduction limit is tied to your modified adjusted gross income.  Please see IRS Pub 590-A for the worksheets to calculate the potential deduction.  <a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/p590a.pdf">https://www.irs.gov/pub/irs-pdf/p590a.pdf</a>