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Personal Finance Topics / Tax Strategies
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Author: bacon   😊 😞
Number: of 75 
Subject: Re: no longer in a 401K
Date: 02/26/2023 9:11 AM
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We retired last year, not yet reaching age 60. So for part of the year we had a qualified retirement plan (401K), and for part of the year we did not. How do IRA contributions work in this situation....

Contributions to IRAs must come from compensation income, stereotyped as W-2 income. If you're retired, what compensation income did you have during the half of the year that you were retired?

Also, as I understand it, if you had an employer-provided retirement plan, e.g., a 401(k), for a day in the year, the IRS considers you covered by that plan for the entire year, and such coverage impacts your ability to contribute to an IRA.

Eric Hines
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