Think staying at home limits your financial growth? Think again! 💪

Danette Lowe is here, revealing a game-changer for stay-at-home parents: the spousal IRA. Regardless of who earns the income, this tool ensures both partners can contribute to their retirement savings, offering a powerful catch-up strategy in the financial planning playbook.

Discover more about leveraging spousal IRAs by watching the entire video on YouTube at Create The Best Me or by listening to the episode on Create The Best Me Podcast on your preferred podcast platform.

Unlocking Financial Growth with Spousal IRAs 🏡

#SpousalIRA #FinancialGrowth #RetirementPlanning #TruNorthWealth #DanetteLowe #ReadyToRetirePodcast #CreateTheBestMe #CarmenHecox…(read more)

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When it comes to planning for retirement, many couples often overlook the potential benefits of utilizing a spousal Individual retirement account (IRA). This strategy allows a non-working or lower-earning spouse to contribute to an IRA based on the income of their working spouse, providing the couple with a valuable opportunity to save for retirement and potentially reduce their tax burden.

The spousal IRA strategy is specifically designed to address the common situation where one spouse does not have earned income and therefore cannot contribute to a traditional IRA. In these cases, the IRS allows the non-working spouse to make contributions to a spousal IRA, using the income earned by the working spouse. This provides a way for both partners to save for retirement, even if one is not bringing in a paycheck.

Contribution limits for spousal IRAs are the same as those for traditional or Roth IRAs – $6,000 per year in 2021, or $7,000 for individuals aged 50 and older. The working spouse must have enough earned income to cover both their own contributions to their own IRA and the contributions to the spousal IRA. Additionally, the couple must file a joint tax return in order to take advantage of the spousal IRA strategy.

One of the major benefits of the spousal IRA strategy is the potential for tax savings. Contributions to traditional IRAs are typically tax-deductible, meaning the couple could reduce their taxable income for the year and potentially lower their tax bill. Additionally, any earnings in the IRA can grow tax-deferred until withdrawals are made in retirement, providing the opportunity for compound growth over time.

Another advantage of the spousal IRA strategy is the ability to diversify retirement savings. By opening a separate IRA for the non-working spouse, the couple can ensure they have multiple sources of retirement income to draw from in the future. This can provide added financial security and flexibility in retirement.

It’s important to note that there are income limits for contributing to a spousal IRA, so it’s crucial to consult with a financial advisor or tax professional to determine if this strategy is right for your situation. Additionally, it’s important to be aware of the rules and regulations surrounding IRAs, such as contribution limits, withdrawal rules, and tax implications.

In conclusion, the spousal IRA strategy can be a valuable tool for couples looking to maximize their retirement savings and reduce their tax burden. By leveraging the income of the working spouse, the non-working spouse can make contributions to a spousal IRA, helping both partners save for a secure financial future. Consider exploring this strategy with a financial professional to see if it could benefit your retirement planning.