Pension Plan to Traditional or Roth IRA

[Dan32]

I've been retired for ~1 year and have been receiving monthly pension payments from a traditional Defined Benefit Plan.

I have no wages (earned income). Is it possible to rollover some of this qualified distribution from a retirement plan into a traditional or Roth IRA?

[gromit]

Let someone else confirm this as a fact, but let me give you a tentative NO. My reason for thinking the answer is no is that I recall looking into the same question a while back. I don't remember where I determined that the answer is no, so I'll defer to others that post.

[travelover]

Do you have a working spouse? You need earned income to invest new money in an IRA.

[Dan32]

I do have a working spouse who works only very part time. We have 80% of her salary going to to 401K (most of the rest goes to taxes, SS, etc). Since my pension check is from a qualified retirement plan, I was hoping to characterize this as a rollover and not a new contribution. Therefore earned income would not be required??

[nun]

You need earned income to contribute to a ROTH or IRA and pension income isn't earned. Your pension check is income and taxable.....and you don't have anything like a DC account balance to rollover.....The only way I can see is if you are offered a buy out and then you would get today's lump sum value of your pension benefit and you would roll that over to an IRA.

[Cat-tirement]

Quote:

Originally Posted by Dan32 I do have a working spouse who works only very part time. We have 80% of her salary going to to 401K (most of the rest goes to taxes, SS, etc).

There is the "Kay Bailey Hutchison Spousal IRA" option if you file a joint return, though it may not help much if your spouse is not working much. From pub 590a:

For 2014, if you file a joint return and your taxable compensation is less than that of your spouse, the most that can be contributed for the year to your IRA is the smaller of the following two amounts:
1. $5,500 ($6,500 if you are age 50 or older), or
2. The total compensation includible in the gross income of both you and your spouse for the year, reduced by the following two amounts.

• Your spouse's IRA contribution for the year to a traditional IRA.
• Any contributions for the year to a Roth IRA on be- half of your spouse.

This means that the total combined contributions that can be made for the year to your IRA and your spouse's IRA can be as much as $11,000 ($12,000 if only one of you is age 50 or older or $13,000 if both of you are age 50 or older).

I am planning on doing this for 2015 as I retired last fall and DW will be working for another year.