If You Work in Retirement, Can You Save in a Retirement Plan?

Yes! Well, probably. If you meet the requirements, there are multiple retirement plans you can choose from.

A smiling older woman works in an office with others.
(Image credit: Getty Images)

If you’re like many affluent retirees, you don’t retire cold turkey. Perhaps you consult for your former employer or the industry you worked in. Maybe you do something else altogether, to keep engaged. Regardless, if you earn self-employment income, you are likely eligible to save funds that you don’t need day-to-day.

Let’s say real estate is your passion. So, after you turn in your keys, you take the real estate salesperson exam. In your first year, you do a deal with a friend, but your marketing and licensing costs are higher than your income. You cannot save into a retirement plan because you didn’t actually have income. From an IRS perspective, these plans will always be based on your net income/profit. If you are reporting income on a Schedule C (sole proprietor), you need line 31 to be positive.

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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Evan T. Beach, CFP®, AWMA®
President, Exit 59 Advisory

After graduating from the University of Delaware and Georgetown University, I pursued a career in financial planning. At age 26, I earned my CERTIFIED FINANCIAL PLANNER™ certification.  I also hold the IRS Enrolled Agent license, which allows for a unique approach to planning that can be beneficial to retirees and those selling their businesses, who are eager to minimize lifetime taxes and maximize income.