Can I Contribute to an IRA When I Have a Pension?

Saving for retirement takes years of planning. A pension through your employer is a good start for retirement savings. An Individual Retirement Account will help supplement federal Social Security as well as pension income. You can contribute to an IRA even with a pension, though some limits apply.

Pension and IRA Contributions

An IRA is a consumer account designed to supplement other retirement savings. The IRS has different allowances for contributions depending on your income and whether or not you are covered by an employer plan. Traditional IRA contributions are affected by whether you are covered by an employer plan while Roth IRA contributions are only affected by income. Traditional IRAs allow $5,000 in annual contributions that may be deductible if you fall within the income limits with phaseout limits at higher income levels allowing partial contributions.

Traditional IRA Limits

You are allowed to make a full contribution if you are covered by a pension plan if you fall below the income limits. The 2011 IRS income limit for a single person is $56,000. A married couple filing joint returns must fall below $90,000 in adjusted gross income to make a fully deductible contribution. You can still make a full contribution but only take a partial deduction with income limits up to $66,000 and $110,000 for single and married filer respectively. These income limits are dramatically reduced compared to those not covered by a pension.

Roth Income Limits

The Roth IRA looks strictly at income and limits contributions if you don't meet income requirements. The income requirements are not affected by employer plan coverage. A single filer is allowed to make a full contribution with income up to $107,000 and partial contributions allowed up to $122,000. A married couple can make full contributions up to $169,000 in adjusted gross income with partial contributions allowed up to $179,000. No contributions are allowed in a Roth if the filers fall above these income limits.


The tax-free growth of a Roth IRA is very attractive when thinking about retirement income. However, the tax deduction can be more significant to you now than the tax free income would be later. If you are in a high tax bracket or anticipate being in a very low or zero tax bracket when retiring, consider the traditional IRA over the Roth. Consult a tax adviser if you are unsure what the best choice is for you.