Question about traditional IRAs and retirement

masmith8118 · ‎March 27, 2023

I retired in March, 2022. My company had a retirement plan that I paid into (401K) and one that I am now receiving benefits from (Pension plan). My question is: Can I contribute $7000 to a traditional IRA for 2022 and get tax benefits from it now?

MinhT1 · ‎March 27, 2023

As you still worked part of 2022 and had a 401(k) plan at work, you are considered as covered by a retirement plan at work in 2022.

Your eligibility for a tax deductible IRA contribution will depend on having sufficient earned income and on your filing status and MAGI as described in this IRS document.

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Opus 17 · ‎March 27, 2023

There is no longer an age limit to contribute to an IRA, but you must have compensation from working to contribute to an IRA. You do have compensation from working for 2022, so you can contribute. Whether you can make a tax-deductible contribution (or a Roth IRA contribution) will depend on your overall income and other factors as described. If you are not eligible to make a Roth IRA contribution or a tax-deductible traditional IRA contribution, you may still be able to make a non-deductible contribution to a traditional IRA, but this has some drawbacks, depending on your overall situation.