Can we use IRA funds to buy back pension for city government?
Posted by Dolores
Bonny asked:
We have an IRA with sizable sum in it. Currently, my husband is buying back several years worth of his pension since he did not initially enroll in when hired. It is costing us almost $500 a month for the buy back, plus another $500 for the regular pension deduction. We still owe $20K to the buy back. Can we transfer money from our IRA to the pension to pay off the buy back without paying taxes on it?
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We have an IRA with sizable sum in it. Currently, my husband is buying back several years worth of his pension since he did not initially enroll in when hired. It is costing us almost $500 a month for the buy back, plus another $500 for the regular pension deduction. We still owe $20K to the buy back. Can we transfer money from our IRA to the pension to pay off the buy back without paying taxes on it?
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March 10th, 2010 at 1:59 am
pension
No. It would be an early withdrawal with all the tax/penalty that is entailed. You can transfer an IRA from one custodian to another, but not into a defined benefit plan like a government pension.