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Subject:Re: Retirement savings for W-2 contractors? From:Steven Brown <stevenabrown -at- yahoo -dot- com> To:"TECHWR-L" <techwr-l -at- lists -dot- techwr-l -dot- com> Date:Fri, 6 May 2005 05:36:35 -0700 (PDT)
Since you receive a W-2, you're not considered
self-employed, so your options are few. If the
employement agency you work with doesn't provide a
retirement plan, all you can do is open a Traditional
IRA or Roth IRA.
If you or your spouse is eligible for a 401(k) plan
during any time during the tax year (even if you don't
contribute to it), your Traditional IRA contributions
may not be deductible. That depends upon your adjusted
gross income. The complicated table at this site will
explain, or you can get a copy of IRS publication 590.
If you don't want to go with an IRA, you can open an
annuity, which has no contribution limits. The
contributions won't be deductible, but the earnings
will grow tax deferred.
Hope this helps.
Steven Brown
Technical Writer
--- "Guy K. Haas" <guy -at- hiskeyboard -dot- com> wrote:
>
> Until this year, I've been a staff employee--first
> as programmer, then as TW.
> I've been putting pretax $$ into 401(k)s for years,
> with or without employer
> contributions.
>
> Now, I find myself contracting through an agency and
> getting a W-2.
>
> I understand that someone who DOES qualify for and
> use a retirement plan in a
> staff position can ALSO have an IRA for
> self-employment income, but I suspect
> that this W-2 modality does not count as
> self-employment.
>
> What can the sages of Techwr-L advise me (us all)
> about the most effective legal
> way to squirrel money away for retirement in the
> case of W-2, particularly if it
> turns out that I go back to a staff position during
> the same calendar year and
> resume the use of the 401(k) mechanism?
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