Frequently Overlooked Ways to Save
Even if you or your spouse are currently not earning an income, there are still several tax-advantaged opportunities to save for the future.
Spousal IRA. You generally need earned income from a job or self-employment to contribute to an IRA. But if you have a job and your spouse does not — whether he or she is staying home with the kids, between jobs, or retired — in 2020 you can contribute up to $6,000 to an IRA on his or her behalf (or $7,000 if age 50 or over), in addition to your own contribution.
IRAs for the semi-retired. You can continue to save even if you’ve retired from your full-time career but still earn some income from a part-time job. You can contribute up to the amount you earned for the year to an IRA (with a $6,000 maximum, or $7,000 if you’re age 50 or over).
Retirement savings for freelancers. If you have any self-employed income — either as freelance work on the side or your only job — you can also contribute to a self-employed retirement plan, such as a Simplified Employee Pension or a solo 401(k). Contributions are tax-deductible and grow tax-deferred for retirement. See the IRS’s Retirement Plans for Self-Employed People to calculate how much you can save.
Please note: The contents of this publication provided by MissionSquare Retirement is general information regarding your retirement benefits. It is not intended to provide you with or substitute for specific legal, tax, or investment advice. You may want to consult with your legal, tax, or investment advisor to review your own personal situation. Some of the products, services, or funds detailed in this publication may not be available in your plan. This document may contain information obtained from outside sources and it may reference external websites. While we believe this information to be reliable, we cannot guarantee its complete accuracy. In addition, rules and laws can change frequently.