topic Re: Roth IRA Eligibility: Basic Question in Retirement tax questions

Roth IRA Eligibility: Basic Question

solosks — Mon, 05 Apr 2021 15:37:09 GMT

Marital Status: MFJ. Ages 64 and 69.

AGI: $270,000

We both collect Social Security

Wife has earned income of $6800

I have a government pension of $104,000. My wife does not have a pension other than SSI.

The rest of our income is investment income.

I understand my wife can make a contribution to a Roth IF we both are not covered by a pension plan.

My question: Because I am retired and collect a pension, does that mean I am enrolled in a pension plan?

Re: Roth IRA Eligibility: Basic Question

Bsch4477 — Mon, 05 Apr 2021 15:52:39 GMT

You are not considered having a pension plan since you are not contributing to it but your limitation is your AGI.

Your eligibility to contribute to a Roth IRA is based on your income level. If you file taxes as a single person, your Modified Adjusted Gross Income (MAGI) must be under $139,000 for the tax year 2020 and under $140,000 for the tax year 2021 to contribute to a Roth IRA, and if you're married and file jointly, your MAGI must be under $206,000 for the tax year 2020

Re: Roth IRA Eligibility: Basic Question

MinhT1 — Mon, 05 Apr 2021 15:55:47 GMT

As your MAGI is over $206,000, you are both disqualified from contributing to a Roth IRA.

It does not matter whether you are or are not covered by a retirement plan at work. For your information, being enrolled in a pension or actually receiving a pension does not mean that you are covered by a retirement plan at work.

Please read this IRS document for more information.

Re: Roth IRA Eligibility: Basic Question

solosks — Mon, 05 Apr 2021 16:28:57 GMT

Thank you.

But just to be clear, since we both are NOT contributing to a pension plan, we are DISQUALIFIED from making a Roth contribution because we make over the $206,000 limit?

Re: Roth IRA Eligibility: Basic Question

macuser_22 — Mon, 05 Apr 2021 16:34:53 GMT

@solosks wrote:

Thank you.

But just to be clear, since we both are NOT contributing to a pension plan, we are DISQUALIFIED from making a Roth contribution because we make over the $206,000 limit?

Being covered by a retirement plan at work only affects deductible Traditional IRA contribution and has no affect on Roth IRA's.

Roth contribution limits are determined by the MAGI on your 1040 form.

See this IRS article for Roth contribution limits:

https://www.irs.gov/retirement-plans/roth-iras

If your filing status is...	And your modified AGI is...	Then you can contribute...
married filing jointly or qualifying widow(er)	< $196,000	up to the limit
	> $196,000 but < $206,000	a reduced amount
	> $206,000	zero