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How To Take Advantage of Spousal & Backdoor ROTH IRA Contributions – Finger Financial Five #118

“With the right vibes and the right people, it’s easy to create something magical.” – Dinah Jane

Did you know that a non-working spouse can contribute to an IRA?

This is called a spousal IRA. 

The couple must file a joint tax return to qualify for a spousal IRA. Each spouse can contribute up to the annual maximum and, if they are over 50 years old, can also make catch-up contributions. 

The working spouse generally funds the contribution, but the spousal IRA is owned by the nonworking spouse. 

A spousal IRA can be either a traditional IRA or Roth IRA. The couple’s total income determines if they can contribute to a Roth IRA. Phase out on Roth eligibility starts at $218,000 of adjusted gross income.

There is a workaround to contribute to the Roth IRA if you are over the income eligibility limits.

It is called the “backdoor” Roth IRA. There are steps to execute a “backdoor” IRA contribution. First, you make a non-deductible IRA contribution, then you convert this to a Roth IRA. You may be subject to aggregation rules if you have other IRA assets. The “back door” works best if you have all of your retirement plan assets (other than your new IRA contribution) in a 401k. 

Let me know if we can help in any way. Email me at [email protected] or CLICK HERE to set up a phone appointment.

News from around the office: Sometimes we are lucky and hit yearly goals quickly. We hired James de Ciutiis, MBA last week. He is going to help with operations management and technology. We are constantly working to make things better, so we can help you more efficiently and effectively. 

James de Ciutiis lives with his wife and three sons in Surfside Beach. He enjoys playing basketball with his sons and traveling. 

On the lighter side, we are heading to the University of South Carolina for orientation for accepted students on February 4th. Do they have a chess class there? Elliott may need to take it. I won the last three games we played. 😊

Hope all is well with you and your family,

Jeremy

Finger Financial Five – 5 points in 5 minutes or less – is to provide you with a weekly shot of useful financial information.  My intention is to share principles, so that you will have more clarity and peace, that help you make better financial decisions.

Investment advice offered through Stratos Wealth Advisors, LLC, a registered investment advisor; DBA Riverbend Wealth Management.

This content is developed from sources believed to be providing accurate information and provided by Riverbend Wealth Management. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stratos Wealth Partners and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.

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