Lump-sum payments and IRAs


Q: If I retire at the end of 2010 and receive my lump sum A/L payment in 2011, will I be able to put money into an IRA or a TSP in 2011 even though I did not actually work that year? Would the lump-sum payment in 2011 be considered earned income?

A: No. The payment is considered deferred compensation and is not a basis for contribution to an IRA or the TSP.


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Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to and view his blog at

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