Hello,
I have been paying into my 403b account through my employer for many years
now. (They match 200%, so it's a great deal.) This year I opened a Roth
IRA in addition to my 403b deposits. However, a surgery gone bad landed me
on disability (insurance provided through my employer) part-way into 2005.
I expected to go back to work this calendar year, but I now find it isn't going to
happen. Further, my doctor is unsure if I will go back to work in 2006.
Because my employer pays the premiums on this disability policy, I pay
federal and state income tax on the disability income, but I do not pay
medicare or social security tax.
My question is that if it turns out that I remain on disability through
2006, will I be ineligible to make deposits to my Roth IRA in 2006?
Further, does it make a difference if I start receiving social security
disability? (My employer's disability policy requires that I apply for
SSDI, which I did, but I was denied and have an appeal pending. As my
employer's policy is coordinated, any income I ultimately receive from SSDI
will reduce what I receive from my employer's insurance.)
One other question.... Let's assume I am not eligible to make deposits to
my Roth IRA while on disability. If I make desposits to my Roth IRA in 2006
expecting to return to work before the end of the year, and I end up not
working in 2006, what happens? I know I would have to retract those
deposits, but is there any penalty for doing so? Or does that depend on the
investment company? (My account is with Vanguard.)
And finally, can anyone point me to a source for all the Roth IRA rules and regulations?
Thanks!