I'm a soon to be retired Insurance agent and am looking at my options regarding Deferred Compensation(DC) and Extended Earnings(EE). These can be paid out in 3-10year increments on form 1099m. I'm over 60 years old and am wondering if I can put these 1099m payments into a 401K of similar tax sheltered plan?

I believe that only active employees are allowed to participate in the company's 401(k) plan, which really is a form of deferred compensation. Once you are retired you are no longer an employee, and therefore not eligible. However, to be sure about this I suggest you call the administrator of your company's plan and ask this question directly of them.

Another option is to fund an IRA using this money,

ebaines-

I'm a self employed insurance agent who has for the past 20 years fully funded a SEP IRA account. From my research I believe if I retire at the end of 2010 and receive Deferred Compensation through 2014 I will be able to continue my IRA contributions during that time considering those payments are previous earnings which I will be receiving over the course of the next 3 years and paying full self-employment tax on as well.

The only sticking point I see in IRS.gov documents is that earnings are classified as coming from services or sales and not from investments. I do believe these deferred compensation fit that criteria as I earned them in previous years and am now receiving them. The insurance company providing the deferred compensation does not guarantee payments and certain non-compete agreements need to be met to receive the full amount of compensation.

Let me know if this sounds correct.

OK - so the question isn't about contributing to a 401(k), but instead whether deferred compensation can be used to fund an IRA, right? The answer is no, at least according to: Traditional IRA:

In order to contribute to a traditional IRA, you must have some form of compensation. Compensation includes wages, salaries, bonuses, and commissions. Compensation does not include deferred compensation or payments such as interest income and stock dividends you might have received during the year.

However, all may not be lost. If the deferred compensation plan is qiualified to IRS code 457(b), then your best course of action may be to roll it directly to an IRA - that way you avoid any taxes (for now). So call the plan admin and ask if the plan is qualified to IRS code 457(b). More info here: How to Convert a Deferred Compensation Retirement Fund to a Roth IRA | Small Business - Chron.com

It is not qualified. I just would like to think if you are paying self employment tax on all this money you should be allowed to utilize some tax relief programs. Another piece of the deferred compensation is something called extended earnings.