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rmerola001
New Member

Do traditional IRA annual contribution limits apply if I am covered by an employer pension / 401k, but do not yet receive benefits or contribute now? I am now retired.

My MAGI is above the 2016 Traditional IRA contribution limitation; however, I can no longer contribute to my employer-sponsored plan.  Currently, I do not receive benefits or distributions from my 401k or defined-benefit pension plan.

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macuser_22
Level 15

Do traditional IRA annual contribution limits apply if I am covered by an employer pension / 401k, but do not yet receive benefits or contribute now? I am now retired.

Generally, you are covered by a defined contribution plan for a tax year if amounts are contributed or allocated to your account for the plan year that ends with or within that tax year.

If you are retired and no new contribution was made either by you or your employer in 2016 then you would not be covered.  However, if you received a 2016 W-2 with box 13 checked, then the employer is saying that you were covered in 2016.


**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.**

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2 Replies
LudwigVan_fan
Level 8

Do traditional IRA annual contribution limits apply if I am covered by an employer pension / 401k, but do not yet receive benefits or contribute now? I am now retired.

I'm assuming that in 2016, you are not working for the employer that covered you with a pension plan, and that no employer covered you in 2016 with a pension plan. Also assuming that in 2016 you have earned income. If both of those are the case, then you would be covered by the rules for IRA contributions for a person not covered by a pension plan. Thus, if your income is above the limits set forth by those rules, then no, I don't think you can contribute. Are you self-employed? If so, that may open up different avenues of contributing...but if not all ready in place, it might be too late for 2016...I'm not sure of that, you would have to check into that.
**Disclaimer: Effort has been made to offer correct information; but due to the discussion forum limitations, the poster disclaims any legal responsibility for the accuracy of the poster's response**
macuser_22
Level 15

Do traditional IRA annual contribution limits apply if I am covered by an employer pension / 401k, but do not yet receive benefits or contribute now? I am now retired.

Generally, you are covered by a defined contribution plan for a tax year if amounts are contributed or allocated to your account for the plan year that ends with or within that tax year.

If you are retired and no new contribution was made either by you or your employer in 2016 then you would not be covered.  However, if you received a 2016 W-2 with box 13 checked, then the employer is saying that you were covered in 2016.


**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.**
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