How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask taxmanrog Your Own Question
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 630
Experience:  Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
Type Your Tax Question Here...
taxmanrog is online now
A new question is answered every 9 seconds

I am 66 years old, work full time and am thinking about

Customer Question

I am 66 years old, work full time and am thinking about collecting my SS. Is there a way I can put part of my paycheck into a retirement fund so I am not taxed on the higher income?
JA: The Accountant will know how to help. Is there anything else important you think the Accountant should know?
Customer: I don't have many write offs for tax purposes so the IRS takes my money evry year.
Submitted: 9 months ago.
Category: Tax
Expert:  taxmanrog replied 9 months ago.

Welcome to Just Answer! Thank you for giving me the opportunity to assist you! I will do my best to help!

Yes, you can contribute to a retirement plan (company 401(k) or an IRA) as long as you have earned income and are under age 70 1/2. However, remember that a retirement plan only saves you income taxes, not Social Security tax. So as you are collecting SS, your wages will still have SS tax withheld.

I hope this answers your questions! If you have any more, please feel free to ask, and I will be happy to answer.

Thanks again! Have a great week!


Customer: replied 9 months ago.
The employment I currently have does not take SS but I have earned enough years to collect. I don't have a 401K or IRA, I have a PERS. Do I take a percentage of my income equal to that of my SS and deposit it into PERS? Thank you
Expert:  taxmanrog replied 9 months ago.

OK. A PERS plan is a bit different. A Public Employees’ Retirement System Plan is a traditional, defined-benefit pension plan — when you meet plan requirements and retire, you’re guaranteed a certain monthly income for the rest of your life. Usually after working at least five years, you are vested and you are eligible to receive your retirement benefit starting at age 65.

You cannot usually put aside more in your PERS plan, as the benefits do not depend on the amounts that you contribute. They are based on your salary and years of service. Usually they take the four, five, six or ten highest years (sometimes they have to be consecutive) and average them to get a monthly average pay. They then give you a percent times your years of service. When I was on a volunteer fire department, the full timers got 2.4% per year of service. So with 30 years' service, they got 72% of their prior 5 years' average pay.

If you have a PERS, you cannot contribute more than the plan formula takes. However, some agencies have a §403 plan that allows government employees to put aside funds, similar to an IRA. If your employer does not, then you still may be eligible for an IRA, depending on your income level.

I hope this helps!


Expert:  taxmanrog replied 9 months ago.

Hi! I was just following up to see if you have any questions. This question is still on my "open" list because you have not rated me yet. If you were satisfied with my services, please rate me highly. This will not change the fees that you paid, but it will close the question for me.



Customer: replied 9 months ago.
How do you qualify for an IRA and what type is better at my age?
Expert:  taxmanrog replied 9 months ago.

To qualify for a regular IRA, you just need to have earned income. You can put in 100% of your earned income up to $6,000. It and its earnings are tax deferred until you pull it out. At age 70 1/2 you have to start pulling the money out. You could also put money into a ROTH IRA, but that has to be kept in there for five years in order to have the earnings become tax free.

I would recommend a standard IRA, which is available just about anywhere.



Customer: replied 9 months ago.
Is that $6,000 a year? Can you have more than one IRA?
Expert:  taxmanrog replied 9 months ago.

You can have as many IRAs as you want, but the maximum combined contribution is $6,000 per year.

Customer: replied 9 months ago.
if I decide to take my Social Security I can only put $6000 total a year in an IRA that will not be taxed but the remainder of $18000 will be added to my income and taxed. The only other choice is a 403?
Expert:  taxmanrog replied 9 months ago.

I said above that you needed to have earned income. Social Security is not earned income. Only wages are. You said you were still working. You can put those wages away.