Workplace retirement plan with zero employer match
Question: To contribute/qualify to contribute to an IRA, one of the requirements is not to have a workplace retirement plan.
I work part time, contribute to a workplace Roth 401k with zero employer match. I am not covered by a pension/defined benefits through my part time work. Is this Roth 401k considered a workplace retirement plan for purposes of being able to contribute to an IRA? If so, I am limited by my AGI so I am not eligible to contribute to a IRA.
second related question: If the above answer is I dont qualify because of the Roth 401k, can I stop my contributions to my workplace 401k and then qualify to contribute to an IRA and spousal IRA?
Thanks!
Permalink Submitted by Alan - IRA critic on Sat, 2024-02-17 00:21
Yes, any 401k contributions result in being treated as covered by a workplace plan for the entire year of the contribution, no matter how small. Being covered results in a maximum AGI limit to deduct IRA contributions, but does not affect non deductible TIRA contributions. If one spouse is not covered but the other is, the deduction for IRA contributions for both spouses can be affected.