#Contribute to IRA if retired (spouse working)
Maximizing Retirement Savings for a Secure Future
When it comes to retirement planning, every dollar saved counts towards a secure future. If you are retired and your spouse is working, contributing to an Individual Retirement Account (IRA) can be a smart financial move to boost your retirement savings. Let’s explore whether you should consider contributing to IRAs for both you and your spouse in this scenario.
Benefits of Contributing to IRAs
- Tax Advantages: Contributions to a traditional IRA are tax-deductible, potentially lowering your taxable income.
- Compound Growth: By investing in an IRA, your savings have the opportunity to grow through compound interest over time.
- Secure Retirement: Building a larger retirement fund can provide peace of mind and financial security in your golden years.
Considerations for Contributions
Before deciding to contribute to IRAs for both you and your spouse, consider the following factors:
- Income Limits: Make sure you meet the income eligibility requirements for contributing to IRAs.
- Contribution Limits: As of 2021, the maximum annual contribution limit for IRAs is $6,000 per person, or $7,000 for individuals aged 50 and older.
- Long-Term Goals: Assess your retirement goals and determine how much you need to save to live comfortably in retirement.
Strategic Retirement Planning
Given your retirement status and your spouse’s income, contributing $6,500 each to IRAs can help you reach your goal of growing your retirement funds to $1.5 million in the next 10 years. With a combined retirement fund of $1.5 million, you can potentially withdraw $100,000 per year from your 401(k), IRAs, and Social Security combined.
Consult with a Financial Advisor
To ensure that your retirement savings strategy aligns with your long-term goals, consider consulting with a financial advisor. They can provide personalized advice and guidance based on your unique financial situation and help you make informed decisions about contributing to IRAs.
In conclusion, contributing to IRAs if you are retired and your spouse is working can be a wise strategy to maximize your retirement savings and secure a comfortable future. By taking advantage of tax benefits, compound growth, and smart financial planning, you can work towards building a robust retirement fund for both of you. Start planning for your retirement today to enjoy a worry-free tomorrow! 🌟
$7000 a year to the IRA
If you file jointly, you can have a spousal IRA
Yup, [spousal IRA’s](https://www.empower.com/the-currency/life/spousal/ira) are allowed if you file joint, and your spouse’s income would need to be >$14,000 (limit is $7,000 each for 2024), and there’s the usual deduction limits for Trad IRA’s income limits for Roth IRA’s.
And that graphic is mostly correct – you can’t quite put in $1,250/month, but that’s maybe about right because at 50 you get to put in more money anyway so that’s about the average. And I wouldn’t do 7% because it’s optimistic and also you shouldn’t really apply compounding to this. If you use an average market return that essentially includes compounding. But it’s not like any of us really know the return anyway.
If you go to Excel/Sheets: `=FV(7%/12,10*12,-1250,-650000)` you’ll get the $1,522,636. Make it say `=FV(6%,10,-14000,-650000)` you’ll get $1.3M.
And make sure your 40k from SS is correct. You cannot use ssa.gov’s numbers here as they assume you work until your retirement age, so they assume you’re putting in all that amount from here until age 62/67/70/etc, increasing your AIME and therefore your PIA. But if you retire at age say 58, that’s 6/9/12/etc years of $0 earnings. I have a calculator if you want it.