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Financial advisor and columnist Michele Cagan
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I am 48 years old. I won $ 310,000 last year and I currently have $ 546,000 in my retirement plan at work. My husband is in handicap and does not work and does not have a 401 plan (K). I wanted to open a Roth will go but I read that I earn too much money. What options do I have to save more money for retirement? I am without debt, with the exception of my mortgage, which I try to get rid of over the next two years before my daughter went to university. What would you advise?
– Nilda
Navigation retirement The rules of the account can be confusing and frustrating, which makes it more difficult to save as much as you wish. You already have a solid base on which to build and more options than you may think to strengthen your savings.
Even if you have a work plan, you can always contribute to a Traditional IrahAlthough your contribution is not deductible. You can also create and contribute to a spouse for your husband. And while you earn too much money to contribute directly to a Roth IRA, you may be able to contribute through a Roth Ira of a stolen door.
As for your mortgage, if your interest rate is less than 4%, it may be worth making additional payments and saving or investing this money instead. High yield savings accounts, for example, currently give around 5%. One -year deposit certificates (CD) even pay up to 5.5% or more. Remember that it is not because savings or investments are not in an official tax retirement account that you cannot use them to finance your retirement.
Consider Financial advisor For more help to save and plan retirement.
A woman reviews her retirement plan and work plan.
Anyone can contribute both to a work plan and a traditional IRA, but your contribution may not be deductible, according to your income.
You can contribute up to $ 6,500 ($ 7,500 if you are 50 or more) to an IRA for 2023. If neither you nor your spouse are covered by a workplace retirement plan, your contributions will be deductible.
However, if you or your spouse have a workplace retirement plan such as a 401 (K), this contribution can only be partially deductible or completely non -deductible. Even if you cannot take a current tax deduction for your contribution, you will always get growth for tax on account. Growth and income will be imposed when you get retired withdrawals.
Another advantage: having money in IRA gives you the opportunity to convert it into a Roth Ira. (And if you need help plan your Roth conversion, Talk to it with a financial advisor.)
The deductibility that you may have depends on the income of your household and the status of deposit:
IRA contribution limits:
Traditional IRA deduction ranges:
If you or your spouse are covered by a retirement plan at work, your tax deduction For traditional IRA contributions can be reduced or progressive depending on your Modified gross adjusted income (MAGI) And deposit status::IRS + 2irs + 2irs + 2
Single depositors covered by a workplace retirement plan:
Complete deduction: Mages of $ 79,000 or less​
Partial deduction: Mages between $ 79,000 and $ 89,000​Irs
No deduction: Mages of $ 89,000 or more​
Joint married deposit (spouse making the IRA contribution covered by a workplace retirement plan):
Complete deduction: Mages of $ 126,000 or less​
Partial deduction: Mages between $ 126,000 and $ 146,000​
No deduction: Mages of $ 146,000 or more​
Married jointly (spouse making the IRA contribution Not Covered by a retirement plan in the workplace, but the spouse is covered):
Complete deduction: Mages of $ 236,000 or less​
Partial deduction: Mages between $ 236,000 and $ 246,000​
No deduction: Mages of $ 246,000 or more​​
Roth Ira Contribution elimination of beaches:
Your ability to contribute to a Roth will ira It also depends on your mage and your deposit status:
In general, you must earn income in order to contribute to an IRA. The exception is if you have a spouse who works and wins enough to cover two IRA contributions. You can open a spouse will go For the non -working spouse. A spouse will give your family a chance to double retirement savings.
Despite its name, a spouse will be different from an ordinary IRA in the way it is put in place or its tax advantages. Nor is it a joint account. Only the non -working spouse has this IRA. To be eligible for a spouse, however, you must use “married deposit” as an income tax file.
The same contribution limits for Roth iSS And the traditional IRA deductibility limits apply in the same way as for any retirement account. The IRA of traditional spouses are also eligible Roth conversions. (And if you have more questions about joint IRA, Consider matching a financial advisor.)
A couple sets up a spouse on a laptop.
The IRA Roth are delivered with some beneficial twists and turns that make them desirable for many taxpayers. On the one hand, as long as you follow the rules, all withdrawals – including growth and profits – are entirely in tax franchise. For another, you don’t have to take Minimum distributions required (RMDS), so your money has more time to develop.
Unfortunately, Roth’s contributions are subject to income limits, locking many people. For 2025, single declarants earning $ 165,000 or more and married reported declarants winning $ 246,000 or more cannot contribute to Roth IRA.
This is where the Stepped door roth comes into play. This conversion process allows high employees to move money seated in their traditional IRAs in the IRA Roth. (And if you need help to set up a steep door Roth, Talk to it with a financial advisor.)
The process is quite simple. If you have not already configured a Roth account, you create one. You tell your administrator will I will want to convert all or part of your traditional IRA into a Roth Ira. You fill out documents and the administrator manages the rest.
Some other warnings to keep in mind:
There is a special Pro rata tax rule Require that you have to consider all your traditional Irah as a whole, the contributions before tax and after tax, to determine the amount of tax to conversion. You cannot choose and choose what money you will want to convert.
That said, retirement tax withdrawals can be worth all potential complications.
You can increase your retirement savings by contributing to an IRA and a spouse even if you have a work plan. You can also create sources of retirement income in tax franchise by converting some of your pension funds to IRA Roth.
Find a financial advisor should not be difficult. The free Smartasset tool You correspond to approved financial advisers who serve your region, and you can have a free introduction call with your advisor games to decide which one you judge for you. If you are ready to find an advisor who can help you achieve your financial goals, Start now.
Consider some advisers before settling down on one. It is important to make sure you find someone you trust to manage your money. When you consider your options, these are the Questions you should ask an advisor To make sure you make the right choice.
Keep an emergency fund at hand in case you meet unexpected expenses. An emergency fund must be liquid – in an account which does not risk significant fluctuation such as the stock market. The compromise is that the value of liquid cash can be eroded by inflation. But a high interest account allows you to gain compound interest. Compare the savings accounts of these banks.
Are you a financial advisor looking to develop your business? Smartasset AMP helps advisers to connect with prospects and offers marketing automation solutions so that you can spend more time making conversions. Learn more about Smartasset amplifier.
Michele Cagan, CPAis a SmartASSET financial planning columnist and answers readers’ questions about personal finances and tax subjects. Do you have a question you would like to answer? Send an e-mail to Askanadvisor@smartasset.com and your question can be answered in a future column.
Please note that Michele does not participate in the AMP Smartasset platform, nor an employee of Smartasset, and she was remunerated for this article.
