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Learning, Sharing, and Teaching => Investor Alley => Topic started by: MattDG on January 01, 2015, 08:20:24 PM

Title: Employer maxes out SEP-IRA. Where else can I contribute?
Post by: MattDG on January 01, 2015, 08:20:24 PM

I'm looking for advice on tax-advantaged accounts.

I live with my wife and two minor children in CO. I make around $250k/yr before tax and my wife stays at home. In addition to this income, my employer contributes the max allowable to an SEP-IRA in my name, i.e., $53k for 2015. My employer also contributes the max allowable to an HSA in my name, i.e., $6,650 in 2015.

I contribute the max allowable to a traditional IRA in my wife's name, i.e., $5.5k in 2015.

The rest of my investments are not tax-advantaged, including 529's for the children.

Are there any other tax-advantaged accounts I could be contributing to each year? Could I contribute $5.5k to a traditional IRA in my own name? Am I even allowed to contribute that much to my wife's?

Thanks!

Title: Re: Employer maxes out SEP-IRA. Where else can I contribute?
Post by: MDM on January 02, 2015, 02:28:46 AM

MattDG, welcome to the forums.

I agree with much of what Cathy said, but regarding spousal IRAs see http://www.investopedia.com/terms/s/spousal-ira.asp.

At $250K/yr (give or take $50K in deductions), you and your wife are ineligible for any deductible IRAs, and also ineligible for a direct Roth contribution.  See http://www.irs.gov/Retirement-Plans/IRA-Deduction-Limits.

You can, however, do a backdoor Roth.  See http://www.bogleheads.org/wiki/Backdoor_Roth_IRA.

Good luck!

Title: Re: Employer maxes out SEP-IRA. Where else can I contribute?
Post by: MattDG on January 02, 2015, 01:20:51 PM

Thank you very much for the information. I will look into a backdoor Roth and stop deducting on the traditional IRA.