[Haseeba]

I am a SAHM and we are really confused on how to best used tax advantaged IRA, Roth IRA, Spousal IRA etc.

I do have a 401K also but im not planning to return to work.

Our income is too high for any of the income based tax advantages but even looking at the explanations online I don’t understand if I am eligible for pretax investment.

I know I can invest post tax in the Roth to avoid future income tax but we also want to maximize current tax savings as well Thanks!

Also, the max overall in the different buckets?

[Rebecca]

If you are under 50, the max that can be put into an IRA (of any flavor is 7k/year in 2024).

There are really 2 types of IRA; Roth and traditional (spousal isn’t an account type-just an allowance made by the IRS to contribute to an IRA if your spouse, but not you have income).

If your income is too high to take a tax deduction on a pre-tax IRA; likely your best bet would be a backdoor Roth. This will have tax benefits in the future, but not now.

Also, an excellent account for anyone dependent on another person’s income as the contributions can be removed any time tax or penalty free.

[Jasmine]

If you’re married filing jointly for taxes, and the household income is too high for a Roth IRA and too high to get a tax deduction for Trad IRA contributions, then I would consider the backdoor Roth IRA process.

Note that ‘backdoor Roth IRA’ isn’t an account type, it’s a process by which high earners can get money into a Roth IRA.

[Jasmine]

First thing I’d say is to clarify that “spousal IRA” isn’t an account type or even a real thing.

It’s just a colloquial term used to describe Trad IRAs and Roth IRAs owned and funded by spouses without earned income.

Usually you need earned income to be eligible to contribute to an IRA.

However, if married filing jointly, the spouse without earned income can be deemed eligible to contribute to an IRA based on the earned income of the married couple.

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