SEP IRA

Archive for September, 2007

Question: Is my former employer required to contribute to my SEP IRA for 2008 if I didn’t work for them all year?

I worked for the same employer from 2001 until April of 2008. I received contributions to a SEP IRA for 2004-2007. I have not received anything for 2008. It was my understanding that there can be no last day of the year employment requirement and I am therefore considered an eligible employee. Is that true? Am I still due a Contribution for 2008?

Answer: If it is a ‘matching’ Contribution – that is, they put in a percent of what you contribute, and you didn’t, then they don’t.

For example, if you contributed $0 and they match it at 3%, their Contribution is 0.

IRA Mortar Attack in South Armagh

Question: Traditional or Roth IRA?

OK, so there is a lot of information out there about this topic, but I can’t seem to find a straight answer to my question as it relates to me. Here goes…

I am interested in opening a retirement fund for my wife. I was thinking the Roth IRA would be best. More background needed though:

My wife is a stay-at-home mom who has no earned income. We file married-jointly and have an earned income somewhere in the $130-160K range. I do have a qualifying retirement plan which I contribute to at work. She (having no earned income) does not.

Based on my situation, I am confused first of all if I am technically eligible to open an IRA for her since she personally does not earn income. Second of all, I don’t know if I am eligible to contribute to a Roth IRA. Also, it does not appear I am eligible to deduct anything on a traditional IRA…but I’m not sure.

Can someone help me out? I’m looking for a simple, straightforward answer if possible.

Answer: The Roth IRA income limit for 2009 is $166k, so you are close to the limit, but apparently below it. If you think you may go above $166k, it would be best to wait and make your Contribution in early 2010, after you know the exact numbers. If your income is between $166k and $176, you are eligible for a partial Contribution.

The fact that your wife has no earned income is irrelevant. It’s your joint income that counts.

If you mean by “qualifying retirement plan” that you are covered by a defined benefit pension plan at work – as opposed to a defined Contribution 401k – then you are right that you can’t make deductible contributions to a traditional IRA. That makes a Roth IRA the way to go for your family.

PAX FINANCIAL GROUP, LLC – Dave Ramsey Endorsed Local Provider – Financial Planning Services

Question: Exempt from bankruptcy/credotors?

Is it true that in the state of Texas, all sorts of retirement Contribution (IRA, SEP, 403b, 401k etc), annuities and homestead are exempt from seizure by creditors in case of bankruptcy etc?

Answer: In PA we have bankrupcy laywers. SOme give free consultations. Why don’t you just contact one of them and that way you will get accurate answers to your questions?

Bogutz & Gordon – Information on Personal Bankruptcy