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Rolling money out of a pension
Old 03-05-2013, 09:16 AM   #1
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Rolling money out of a pension

My wife worked too little time to receive credit with her pension the first year she was there. The dollar amount is just under $100. I was working on taxes and realized I should "roll" this into our Roth IRA. What are the rules we have to follow? This checked was cashed at our bank many months ago, but we make weekly contributions to our Roth IRAs. The contributions are larger than the check was for. Does this count as a conversion? Or did I need to actually send the check to vanguard?

No sense in paying a $10 penalty if I don't have to. Should have thought about this back then.
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Old 03-05-2013, 09:46 AM   #2
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As a general rule, you need to deposit the amount received from a tax sheltered plan into your Roth IRA within 60 days in order to avoid taxes and the 10% penalty. I'm not certain what kind of distribution this ~$100 was, but it most likely has the same 60 day rule. So you are probably too late to think about rolling it into your Roth. Luckily for you, the dollar amount is quite tiny.
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Old 03-05-2013, 10:09 AM   #3
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But if there are weekly Ira deposits occurring, wouldn't they count?
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Old 03-05-2013, 10:23 AM   #4
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Originally Posted by Too young to work View Post
But if there are weekly Ira deposits occurring, wouldn't they count?
I would be astonished if you could retroactively repurpose contributions the way you seem to be thinking. When you made those contributions last year, you must have been required to state that they were regular contributions for the 2012 tax year - that's what I have to do when I make contributions to my Roth IRA at Vanguard. It's too late now to go back and try to say, "Sorry, I really meant part of this contribution to be a rollover amount."

If you really want to pursue this, I suggest that you contact your IRA custodian and see what they say. I wouldn't get my hopes up, though.
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Old 03-05-2013, 10:44 AM   #5
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Ok, good to know. It's not worth all the trouble for $10. Thanks!
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Old 03-05-2013, 01:33 PM   #6
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I'd call Vanguard and ask them if you can make your 2012 contributions your normal limit +100 and effectively recharacterize $100 of one of the earlier contributions as a rollover. I suspect they will say no but there is no harm in asking.
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