December 16, 2009
Most retirees are convinced they can no longer contribute to their retirement saving.
There is an exception that is often overlooked. If you retire and your spouse continues to work, even part-time, you may qualify for a "spousal IRA" contribution. For example, you retire at 60 years old, your 60 year old spouse works part-time earning $12,000, each of you can contribute $6000 to a deductible IRA (assuming your adjusted gross income is not too high). You can continue to make deductible contributions until the year you turn 70 1/2 years old. Now for the exciting part......a "spousal ROTH IRA" has no maximum age limitation. If you are 85 years old and your spouse works part-time earning $12,000 per year you can each contribute $6000 to your ROTH. There is no required distribution from a ROTH IRA. The ROTH can grow tax-free and can be passed to your heirs tax-free. This is definitely something to consider.
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).