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Defined Contribution--Personal IRA
03-04-2014, 08:29 PM
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#1
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Full time employment: Posting here.
Join Date: Dec 2012
Posts: 656
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Defined Contribution--Personal IRA
My wife worked for local govt. She paid into her defined benefit plan and defined contribution plan.
Is she allowed to also have her own personal IRA too? She tells me "no" but I just don't know. Any help is appreciated. Thank you.
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03-04-2014, 09:48 PM
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#2
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Recycles dryer sheets
Join Date: Jan 2014
Posts: 456
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Quote:
Originally Posted by mikefixac
My wife worked for local govt. She paid into her defined benefit plan and defined contribution plan.
Is she allowed to also have her own personal IRA too? She tells me "no" but I just don't know. Any help is appreciated. Thank you.
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Having an IRA shouldn't be a problem as long as she has earned income. Remember there are income limits when it comes to contributing to a Roth IRA.
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03-05-2014, 08:35 AM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2009
Posts: 9,343
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Quote:
Originally Posted by PERSonalTime
Having an IRA shouldn't be a problem as long as she has earned income. Remember there are income limits when it comes to contributing to a Roth IRA.
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There are income limits for the regular IRA, also. If memory serves those income limits are more limited than the Roth.
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03-05-2014, 01:07 PM
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#4
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2005
Location: Chicago
Posts: 13,151
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Quote:
Originally Posted by Mulligan
There are income limits for the regular IRA, also. If memory serves those income limits are more limited than the Roth.
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Did you mean there are income limits regarding the deductibility of a TIRA?
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
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03-05-2014, 01:23 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2009
Posts: 9,343
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Quote:
Originally Posted by youbet
Did you mean there are income limits regarding the deductibility of a TIRA?
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Youbet, I guess I should make sure we are talking about the same thing. I was under impression OP was looking at the traditional IRA, which I think that is what you are referring to also. If you are covered by a pension system, you have income limits on ability to contribute. I was always over limit so I never could, but fortunately was under for the Roth.
A married couple has to be under 95k MAGI to get full deduction. As a single if you are over $59k you are phased out and at 69k MAGI you get no deduction.
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03-05-2014, 05:00 PM
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#6
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Full time employment: Posting here.
Join Date: Dec 2012
Posts: 656
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Thanks. OP here. Yes. I am referring to a traditional IRA.
So I take it she is eligible?
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03-05-2014, 05:29 PM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2009
Posts: 9,343
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Quote:
Originally Posted by mikefixac
Thanks. OP here. Yes. I am referring to a traditional IRA.
So I take it she is eligible?
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Mike the way I understand it is this. Yes, she can provided you as a couple are under the income guidelines... Caveat...Is she still working or retired already? If she is retired she will have to earn income besides pension income to contribute to one. So she would have to get a job! I did this to continue my Roth contributions in retirement and may do it this summer also for this years contribution.
http://www.irs.gov/Retirement-Plans/...duction-Limits
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03-05-2014, 11:44 PM
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#8
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Full time employment: Posting here.
Join Date: Dec 2012
Posts: 656
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Thanks Mulligan.
Yes, she's retired but started her own business. She retired but is not drawing retirement yet.
Years ago I sold a house and during tax time my tax lady said I'm going to be taking a big hit with my taxes that year. I said "What for"? She said because you sold your house and you made a profit. I told her about selling house and not having to pay taxes on it, provided I lived in the house for 2 years and profit was under $250K. She said I was wrong. Lawyer wife said I was wrong too. What do I know, I'm just a repairman. Fortunately, accountant lady looked into it and found out I was right.
So again tax man and lawyer wife tell me she cannot have a traditional IRA. I think they're wrong. I'm hoping others would chime in and then give this thread for my wife to read.
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03-06-2014, 05:09 AM
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#9
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Recycles dryer sheets
Join Date: Jan 2014
Posts: 456
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Quote:
Originally Posted by mikefixac
Thanks Mulligan.
Yes, she's retired but started her own business. She retired but is not drawing retirement yet.
Years ago I sold a house and during tax time my tax lady said I'm going to be taking a big hit with my taxes that year. I said "What for"? She said because you sold your house and you made a profit. I told her about selling house and not having to pay taxes on it, provided I lived in the house for 2 years and profit was under $250K. She said I was wrong. Lawyer wife said I was wrong too. What do I know, I'm just a repairman. Fortunately, accountant lady looked into it and found out I was right.
So again tax man and lawyer wife tell me she cannot have a traditional IRA. I think they're wrong. I'm hoping others would chime in and then give this thread for my wife to read.
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There's no income limit regarding whether or not she can open a traditional IRA, but a limit is applicable when determining if that IRA is deductible or not. Also, there are income limits for a Roth IRA. Remember, she must have "earned" income in either case.
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03-06-2014, 05:51 AM
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#10
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Thinks s/he gets paid by the post
Join Date: Feb 2007
Posts: 3,679
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Earned income does not have to be from a W2. It can be from your own business. So her earnings from her business count.
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Married, both 69. DH retired June, 2010. I have a pleasant little part time job.
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03-06-2014, 06:50 AM
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#11
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Thinks s/he gets paid by the post
Join Date: Jul 2012
Location: Mississippi
Posts: 1,894
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sounds like she will be self employed ? You have more options then and different rules. You can have your own 401k
IRS link, Retirement Plans for Self-Employed People
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03-06-2014, 09:13 AM
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#12
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2009
Posts: 9,343
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Quote:
Originally Posted by mikefixac
Thanks Mulligan.
Yes, she's retired but started her own business. She retired but is not drawing retirement yet.
Years ago I sold a house and during tax time my tax lady said I'm going to be taking a big hit with my taxes that year. I said "What for"? She said because you sold your house and you made a profit. I told her about selling house and not having to pay taxes on it, provided I lived in the house for 2 years and profit was under $250K. She said I was wrong. Lawyer wife said I was wrong too. What do I know, I'm just a repairman. Fortunately, accountant lady looked into it and found out I was right.
So again tax man and lawyer wife tell me she cannot have a traditional IRA. I think they're wrong. I'm hoping others would chime in and then give this thread for my wife to read.
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Rbmrtn gave you a great link to consider. Mike it is amazing how you think people know something and do not. In my state health insurance premiums are a tax write off. I had a friend retired for 4 years, and not once did his tax preparer ever give him that deduction. I have another friend whose tax accountant is giving him a college opportunity credit tax even though the state is paying the full tuition. I told him you better check that, and he called the man, and he said you could. That guy obviously isn't listening to the question as you can not get the credit for college expenses that you did not pay for. My friend thinks the guy knows what he is doing since he is "the expert".
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