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Monthly pension benefits into IRA?

Question: Can monthly pension benefits be deposited directly into an IRA and be treated as a rollover thus deferring taxes? Question: Can monthly pension benefits be deposited directly into an IRA and be treated as a rollover thus deferring taxes? I am 58.5 and the prospects for permanent employment are not good. I wish to begin taking pension payments. Once I start the payments they can not be stopped. If I should later find gainful employment, I would wish to avoid the taxes on the pension until such time as my tax bracket is lower. A lump sum payment from the pension is not an available option. It would seem that I could have the pension payments made to me now and then directly into an IRA account later if I choose simply by changing the electronic deposit destination. Bill, Shoreview, MN

Answer: Answer: I'm assume you're talking about a traditional defined benefit pension plan from your employer. In that case, the answer is no, I'm sorry to say. The monthly pension benefit you'll receive is considered taxable income. Those monthly payments can't be sheltered from taxes by rolling the payment into an IRA. (If you did have the option of a lump-sum payment you could roll the benefit into an IRA. But that's up to the plan, and yours doesn't allow it.)

About the author

Chris Farrell is the economics editor of Marketplace Money.
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