Looking to maximize your family’s retirement savings?
Consider a spousal IRA.
This lets couples save for retirement even if only one spouse has earned income.
You must have earned income to contribute to IRAs. Spousal IRAs though are an exception to this rule
Say you are married. You have earned income, however your spouse does not.
You can contribute up to the contribution limit in your IRA and contribute up to the contribution limit in your spouses. For 2024, that is another $14,000 if under 50 to be saved for retirement.
To implement this you need to:
- Be married and file your taxes jointly
- Working spouse’s income must be at least equal to the contributions
Once you are ready to contribute follow these steps:
- Open either an IRA or Roth IRA for you
- Your spouse will need an IRA or Roth IRA as well
- Once open, begin contributing
- Then choose your investments
*Do not forget this final step as it is often missed.
Side note. Consider if you want to contribute to an IRA or a Roth IRA.
Remember Roth IRAs have income limits. Meaning if you make too much you are not eligible to directly contribute to a Roth IRA. For IRA contributions, if you or your spouse are participating in an employer sponsored plan it depends on your income whether or not you get a deduction. If you do not get the deduction, it may be more advantageous to contribute via the Backdoor.
Otherwise you contribute to an IRA via a non-deductible contribution and your money will be taxed down the road. So, no tax savings for you today and taxed later…
If you are below the income limits for Roth IRAs and qualify for a deduction for contributions to IRAs then the decision whether to fund an IRA or Roth IRA comes down to a few things.
Here are a few factors to consider:
- What are you making today? Do you see yourself continuing to make more?
- What do you think you will make in retirement?
- Where do you see taxes going? Up or down?
Those are a few factors to consider because not all money is taxed the same.
Take control of your financial future by starting to plan today. This can be a great way to boost retirement savings and even potentially save you taxes today or enjoy tax free withdrawals later on.
Disclosure:
Retirement Planning Solutions, LLC is an SEC registered investment adviser. SEC registration does not constitute an endorsement of Retirement Planning Solutions, LLC by the SEC nor does it indicate that Retirement Planning Solutions, LLC has attained a particular level of skill or ability. This material prepared by Retirement Planning Solutions, LLC is for informational purposes only and is accurate as of the date it was prepared. It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product. Advisory services are only offered to clients or prospective clients where Retirement Planning Solutions, LLC and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Retirement Planning Solutions, LLC unless a client service agreement is in place. This material is not intended to serve as personalized tax and/or investment advice since the availability and effectiveness of any strategy is dependent upon your individual facts and circumstances. Retirement Planning Solutions, LLC is not an accounting firm. Please consult with your tax professional regarding your specific tax situation when determining if any of the mentioned strategies are right for you.