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Old 12-16-2016, 09:47 AM
 
Location: Grove City, Ohio
10,133 posts, read 12,387,762 times
Reputation: 13976

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I am 68 and as I understand it next week I can contribute $6,500 to my IRA account.

Married, wife doesn't work and on social security... if I got it right I can't put any money in her IRA account? What I would like to do is get rid of $13,000 but if I can't... well...

If I deposit the $6,500 next week I get to take the tax deduction and I can withdraw all of that money next year, as early as February or March if I want to, and nearing 69 I will not pay a penalty just the taxes owed on the money NEXT YEAR.

Thing is I am looking at my earned income dropping by well more than half next year lowering the tax rate.

Do I understand this correctly?
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Old 12-16-2016, 10:02 AM
 
Location: SoCal
13,229 posts, read 6,335,450 times
Reputation: 9849
You can contribute to your wife as well. Only one person needs to be working. I'm doing the same thing this year because I didn't work this year but my husband did. I need to decide whether it's going to be Roth or non Roth.
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Old 12-16-2016, 10:04 AM
 
Location: Grove City, Ohio
10,133 posts, read 12,387,762 times
Reputation: 13976
Quote:
Originally Posted by NewbieHere View Post
You can contribute to your wife as well. Only one person needs to be working. I'm doing the same thing this year because I didn't work this year but my husband did. I need to decide whether it's going to be Roth or non Roth.
So I can sock $13,000 away and then take it all out next year paying a much lower tax rate?
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Old 12-16-2016, 10:06 AM
 
Location: SoCal
13,229 posts, read 6,335,450 times
Reputation: 9849
Quote:
Originally Posted by nicet4 View Post
So I can sock $13,000 away and then take it all out next year paying a much lower tax rate?
Yes, edit to add that provided that you earned at least $13,000 this year.

Last edited by NewbieHere; 12-16-2016 at 10:54 AM..
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Old 12-17-2016, 09:27 AM
 
Location: RVA
2,165 posts, read 1,266,787 times
Reputation: 4456
Correct on all counts! That's why it's called tax deferred.
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Old 12-20-2016, 05:07 AM
 
Location: Central Massachusetts
4,800 posts, read 4,848,939 times
Reputation: 6379
I am confused here though. Please do not get me wrong on this. I am not being judgmental just curious on the reasoning.

OP is considering putting away $13k this year only to pull it out next year? Do I understand that correctly? I guess this would only be for one reason. OP is going to pull the plug at the end of this year and be in and on retirement income next year. Did I get that right? Otherwise the idea of putting 13k in a tIRA is for future income.
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