Wednesday, April 2, 2014

Retirement for the Unemployed

Yesterday I mentioned that Peanut and I are maxing out our Roth IRA contributions for 2013 and considering that money to be part of our emergency fund. The eagle-eyed among you might have wondered how we're doing that, since I'm a stay-at-home mom with no income, and Roth IRA rules state that you can only contribute up to your taxable income.

Enter the "Spousal IRA".

This is not really a thing, as we found out. I thought it would be a separate account that we'd open and Peanut would have to contribute to it in my name, or something like that, but it turns out that it's just a conceptual way of treating a married couple. We will put the money in my existing Roth IRA, using the taxable income that I earned (I worked for the first two weeks of 2013) and then Peanut's income for the rest of the year as proof that we have a) earned more than the contribution limits and b) earn less than the maximum adjusted gross income to qualify for a Roth IRA.

Hopefully we'll be able to do that for every year that I stay home so that my retirement contributions will stay on target. I'm a few years older than Peanut so I am already a few years ahead of him in retirement savings, but what's mine is his and all that, and we don't want to be eating Alpo in our old age. We consider all our money to be "our money" anyway, so it's nice in this case that the government does the same.

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