Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Starting Roth IRA after retirement
Old 12-15-2019, 05:49 AM   #1
Full time employment: Posting here.
 
Join Date: Nov 2017
Location: solomons
Posts: 849
Starting Roth IRA after retirement

I guess i always understood you could start a Roth anytime, even after retirement? This was thinking that pensions were earned income!

This is a piece out of imvestopedia Understanding earned income "Also in this category are disbursements from non-deferred pensions and retirement plans"

If this is true DW retires 24Dec from Md State Retirement System, i need to get her Roth IRA started ASAP. And i retire from Federal service next year so we'll start mine too.

Please help me understand...

Thanks.
f35phixer is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 12-15-2019, 05:59 AM   #2
Recycles dryer sheets
 
Join Date: Nov 2006
Posts: 428
Yes. I started my conversions this month. Previously income limits prevented me from contributing to a ROTH, but now transfers from 401K are mostly limited by how much tax I want to incur.


A useful link for a start: https://www.cnbc.com/2019/12/12/here...-benefits.html
Tekward is offline   Reply With Quote
Starting Roth IRA after retirement
Old 12-15-2019, 08:41 AM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 9,343
Starting Roth IRA after retirement

Pensions are not earned income, so no possibilities there. Im a pensioner retired about 10 years ago. I have constantly contributed to Roth post retirement....The old fashioned way...A part time job gig that I used to fully fund it. Needless to say, if I could have shuffled pension money into a Roth, there would have been no gigs!
Mulligan is offline   Reply With Quote
Old 12-15-2019, 12:18 PM   #4
Thinks s/he gets paid by the post
 
Join Date: Aug 2014
Location: Chicago West Burbs
Posts: 2,998
My understanding is that pensions are not considered earned income so cannot be used to "contribute" to a Roth. One can do a Roth Conversion from some retirement accounts if allowed by that account. I believe that one can open a Roth with that conversion. I am not certain of that. You may have to ask.

From https://www.irs.gov/credits-deductio.../earned-income

Quote:
Examples of income that are not earned income:
Pay received for work while an inmate in a penal institution
Interest and dividends
Retirement income
Social security
Unemployment benefits
Alimony
Child support.
I recommend for anyone to open a Roth for at least the minimum amount as early as possible. This gets the clock ticking. It gives one a lot flexibility in managing their retirement investments.
CRLLS is online now   Reply With Quote
Old 12-15-2019, 02:41 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 7,865
Quote:
Originally Posted by CRLLS View Post
My understanding is that pensions are not considered earned income so cannot be used to "contribute" to a Roth. One can do a Roth Conversion from some retirement accounts if allowed by that account. I believe that one can open a Roth with that conversion. I am not certain of that. You may have to ask.
You can open a Roth account any time.

You can only contribute to a Roth with earned income.

You can convert to a Roth if you have a suitable account to convert from (typically a traditional IRA) and are willing to pay the associated taxes.

The custodian could maybe charge custodial fees if you opened a Roth and left the balance at $0 for a while, but opening a $0 Roth and then doing conversions shortly afterwards is almost certainly acceptable.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Old 12-15-2019, 05:47 PM   #6
Thinks s/he gets paid by the post
PaunchyPirate's Avatar
 
Join Date: Feb 2014
Location: NW Pennsylvania
Posts: 1,810
I started my Roth account this year after retiring at the end of last year. I only had $4600 of earned income this year from a final commission check from my employer that fell into January. I put $3600 in my Traditional IRA to lower my overall income some for ACA tax credit purposes. I put $1000 in a Roth to get the account open. I hope to do some Roth conversions from the Traditional IRA in the coming years into that Roth. I wanted to get it open to start the clock ticking toward the 5-year milestone for making withdrawals, just in case.
PaunchyPirate is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Are you starting retirement with a high starting WR? Carpediem FIRE and Money 42 05-15-2017 11:09 AM
Can I do both Backdoor Roth IRA and Mega Backdoor Roth IRA? growerVon FIRE and Money 8 07-30-2015 01:04 AM
Traditional after-tax IRA -> Roth IRA conversion easy? wanaberetiree FIRE and Money 3 09-16-2013 08:10 AM
converting IRA to Roth IRA based on new Roth Rules vs. 72t mbmmccoy FIRE and Money 27 09-28-2009 06:27 AM
Questions about limits surrounding ROTH IRA, SEP IRA and ROTH 401k RockSplat FIRE and Money 14 06-08-2009 12:30 PM

» Quick Links

 
All times are GMT -6. The time now is 09:16 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.