This week's topics: IRA contributions, deductions, and transferring your IRA from one broker to another.

Dear Gail,

First question: 

My wife does not work. My MAGI is in excess of $160,000. I am covered by a retirement plan and have access to a 401(k) which allows me to contribute after-tax earnings up to 16% of my income. The company also provides matching funds up to $2500 into my 401(k). 

Can I contribute to a Roth IRA after I've maxed out my 401(k) contributions for the year? Can I also contribute to my wife's ROTH IRA account? Am I limited to ONLY depositing $2000 into these ROTH IRA accounts or can I put in as much after tax money as I want? 

Second question: 

Is there a provision in the tax law for "catch-up" IRA or 401(k) contributions? If I didn't invest when I was younger because the funds were unavailable, is there any allowance for me to "catch up" these contributions in a tax-deductible way? 



Dear Ted,

You and your wife have the happy problem of earning too much income to qualify for either a deductible IRA or a Roth IRA. You could, however, still contribute to "non-deductible" IRAs and get the benefit of tax-deferred growth on your investment earnings. The limit is still $2,000

There are several pieces of legislation bouncing around Congress right now which would raise IRA contributions to $5,000/year. Under one provision, higher IRA contributions would be phased in gradually over several years. However, as you mention, there is a so-called "catch-up" provision which would allow workers aged 50 and older to put up to $5,000 starting next year. If you like these ideas, I suggest you let your representatives know you expect their support of these measures.

Good luck,


Dear Gail,

Last year I took a distribution on $7,300.00 from my IRA. I had no other income except Social Security. Do I have to pay taxes on the $7,300.00? Do I have to file a return? I'm 69 years old and retired.


Dear George,

Assuming your IRA is the old-fashioned kind which allowed you to deduct your contributions the year you made them, then, yes, you do owe income tax on this amount. By allowing you to subtract your IRA contributions from your annual income, the IRS gave you a break: you didn't have to pay income tax on that money in the year you earned it. Instead, taxes were deferred until you withdrew the money from your IRA.

Yes, you need to file an income tax return and report this withdrawal as well as your Social Security and other income received.

Take care —


Dear Gail, 

I want to move my traditional IRA from one broker to another. Can I do it without paying penalties or taxes? 

Thank you, 


Dear Wes,

Absolutely, positively YES. The safest way to accomplish a transfer of your IRA account is via a "trustee-to-trustee" transfer. That is, the custodian of the new IRA you're opening contacts the trustee of your existing account and tells them to hand over the money. In other words, you don't physically take possession of any funds.

Your new broker should be happy to handle this routine task.


P.S. By the way, folks, although your IRA custodian might tell you otherwise, drag their feet and kick and scream, you can move your IRA even if you are over 70 ½ and taking required distributions. Sometimes they forget that it's YOUR money.

If you have a question for Gail Buckner and the Your $ Matters column, send them to moneymatters@foxnews.com along with your name and phone number.

The views expressed in this article are those of Ms. Buckner or the individual commentator, and do not necessarily reflect the views of Putnam Investments Inc. or any of its affiliates. You should consult your own financial adviser for advice regarding your particular financial circumstances. This article is for information only and is not an offer of the sale of any mutual fund or other investment.