Retirement on the Run

Note: This is the actual untouched question I received.

Dear sr

my friend have a criminal case pending in the USA ,he does not return to the US to face it , now he wants to receive his retirement money but we will like to know if it is true that he can not receive anything until he will return to the USA and face his legal situation .He is USA citizeen

Please answer me back ASAP

Yolanda from South America

Answer

Yolanda,

Although I am glad to give retirement advice, this is a situation that requires legal advice from a lawyer. I would also suggest that you check out the following web site: www.socialsecurity.gov/onlieservises/ Click on the "Do you Qualify for Benefits?" link, and I think you will find some valuable information.

Good luck to you, you are probably going to need it.

Jan Jaffin

Reply

Dear Mr. Jaffin

thanks for your advice on the social security matter. He is allready contacting an Attorney to clear up his legal situation.

You are doing a great job and I thank you one´s more time

Yolanda

IRA Contribution Limits

During 2009, I worked for 2 months for a company that offered a 401k. During that time, I contributed $1927. Then, I went to work for another company that does not offer a 401k. I am 54 years of age. How much can I contribute to my IRA? Also, my wife worked for a company that offered a 401k, again, for 2 months. She contributed $1267. She did not work for the rest of the year. She is 45 years of age. How much are we allowed to put into her IRA?

Thanks,

Lance from Kansas City, KS

Answer


The simple answer to your question is, you may both contribute to a Traditional IRA for 2009 (up to April 15, 2010). Taxpayers age 50 and over are allowed to contribute an additional $1,000 as a "catch-up" contribution. Therefore, since you are over age 50, you can contribute $6,000, and since your wife is under age 50, she can contribute $5,000.

The question is whether you can deduct the IRA contribution from your taxes. The answer to that depends on your modified adjusted gross income for 2009. I am assuming you are married, filing jointly. If so, since you both had a qualified retirement plan available to you during 2009, if your MAGI is $89,000 or less, you can have a full deduction. If your MAGI is more than $89,000, but less than $109,000, you can have a partial deduction If your MAGI is $109,000 or more, you may not deduct any of your contribution. If you are in the $89,000 to $109,000, there is a formula in IRS Publication 590, which will tell you how much you may deduct.

For a Roth IRA, generally you both may contribute to a Roth IRA as long as you had taxable compensation for 2009, and your modified adjusted gross income is $176,000(married filing jointly). The limits are the same as for a Traditional IRA, $5,000 each, plus an additional $1,000 for taxpayers age 50 and over. Please remember, you cannot contribute the maximum amount to a Traditional IRA and Roth IRA, you may only contribute a TOTAL of $5,000 each (plus the $1,000 catch-up for yourself).

The key here is that you are able to contribute to a Traditional IRA, regardless of your income or availability of a Qualified Retirement Plan.