Question

pension rollover

Forum|Forum|6 years ago
March 20, 2020
1 reply
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I receive a monthly pension annuity (taxed). I am also still working and am putting essentially the same amount as I receive from my pension (after tax) into my 401K, Roth, and associated catch up contributions. Can I consider this as a rollover of my pension annuity? also, this year I turned 60, therefore, straddled the 59-1/2 division. tia

macuser_22

Employee

Periodic pension distribution are not eligible to be rolled over into any other retirement account.

You can contribute to a Roth IRA as long as you have taxable compensation (money that you worked for) at least as much as the contribution.

The most you can contribute to all of your traditional and Roth IRAs is the smaller of:

For 2018, $5,500, or $6,500 if you’re age 50 or older by the end of the year; or
your taxable compensation for the year.
For 2019, $6,000, or $7,000 if you’re age 50 or older by the end of the year; or
your taxable compensation for the year.

(Taxable compensation is generally wages that you worked for - W-2 or net self-employed income minus the deducible part of the SE tax, but can include commissions, certain alimony and separate maintenance, and nontaxable combat pay ).

See IRS Pub 590A "What is compensation" for details:
https://www.irs.gov/publications/p590a#en_US_2018_publink1000230355

See this IRS article for Roth contribution limits:

https://www.irs.gov/retirement-plans/roth-iras

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**