Is my pension considered part of my modified adjusted gross income when contributing to a Roth IRA?

by Harold P. Eck, CPA | Jan 25, 2019

I am retired from a local government job and receive a pension of about $65,000 a year. I am working in retirement, making about $75,000 a year. Last year I made $141,000 between my pension and salary, and contributed over $6,000 into a 457 plan. Is my pension considered part of my "modified adjusted gross income" when it comes to contributing to a Roth IRA?

The information included in your question indicates that you are a single filer. 

The 2018 phase-out range for single filers is $120,000 to $135,000. Below that, you could make a full Roth IRA contribution for 2018; above that, no Roth IRA contribution for 2018.

Your adjusted gross income (AGI) for 2018 is $141,000. Your modified adjusted gross income (MAGI) for 2018 is also $141,000. None of the “modifiers” are applicable. 

The answer to your question is yes: your pension income is considered part of your MAGI. You are precluded from making a Roth IRA contribution for 2018.

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: Harold P. Eck, CPA, is an individual practitioner in Jersey Shore, Pa.

The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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