Latest news with #retirementsavings
Yahoo
2 days ago
- Business
- Yahoo
Suze Orman: How To Boost Retirement Savings With a Spousal IRA
Millions of Americans work in the home without getting paid. According to the Pew Research Center, 18% of parents are stay-at-home moms and dads. Beyond parenting, millions of adults care for elderly relatives or siblings with special needs without receiving a paycheck. While this unpaid work often saves families thousands of dollars a month, it can make saving for retirement a challenge. Read More: Find Out: Personal finance expert Suze Orman understands that earned income isn't always a reality. In her recent blog, 'Boost Retirement with a Spousal IRA,' she explains how non-working spouses can still build retirement savings. The Hardest Job in the World Few would argue that staying at home to care for a child, parent or loved one isn't demanding. If stay-at-home parents were compensated for all the work they do, estimates their median annual salary would be $184,820. In reality, caregivers remain on call 24 hours a day, with no overtime, paid benefits or raises. And because they don't receive earned income, they typically can't contribute to an Individual Retirement Account (IRA). However, there is one option: A spousal IRA, which allows a non-working spouse to contribute as long as their partner has earned income. What Is a Spousal IRA? As reported by U.S. News & World Report, the IRS allows a working spouse to make an IRA contribution on behalf of a spouse who isn't working, often referred to as a Spousal IRA. For 2025, a person who is 49 years or younger may contribute $7,000 to an IRA, and a person who is 50 years old or older may contribute $8,000. This means an eligible couple could contribute as much as $16,000 combined, depending on age. With a traditional IRA, contributions are tax-deductible in the year they are made, but withdrawals in retirement are taxed. Discover Next: Can a Non-Working Spouse Contribute To a Roth IRA? Many people are aware of the tax advantages associated with a Roth IRA. Unlike a traditional IRA, where taxes are deferred until withdrawal, money contributed to a Roth IRA is done with income that has already been taxed. Therefore, there aren't any immediate tax benefits, but when the money is withdrawn, it is done 100% tax-free. While this may be ideal for some couples, there are limitations as to who can contribute to a Roth IRA. As noted in Orman's article, the joint modified adjusted gross income (MAGI) must be below $236,000 for a couple to contribute the maximum to a Roth IRA in 2025. Can All Non-Working Spouses Contribute To an IRA? While many non-working spouses with a spouse who has earned income will be able to take advantage of a spousal IRA, there are some rules. First, the couple must be married and file a joint federal tax return. Second, the tax return must show earned income from at least one spouse. It is important to note that while many people may be able to take advantage of a Spousal IRA, it is always best to consult with a tax professional before filing. A tax expert can help provide guidance on the legalities behind a Spousal IRA and ensure that all qualifying criteria are met. More From GOBankingRates New Law Could Make Electricity Bills Skyrocket in These 4 States I'm a Self-Made Millionaire: 6 Ways I Use ChatGPT To Make a Lot of Money 5 Strategies High-Net-Worth Families Use To Build Generational Wealth Warren Buffett: 10 Things Poor People Waste Money On This article originally appeared on Suze Orman: How To Boost Retirement Savings With a Spousal IRA Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 days ago
- Business
- Yahoo
Suze Orman: How To Boost Retirement Savings With a Spousal IRA
Millions of Americans work in the home without getting paid. According to the Pew Research Center, 18% of parents are stay-at-home moms and dads. Beyond parenting, millions of adults care for elderly relatives or siblings with special needs without receiving a paycheck. While this unpaid work often saves families thousands of dollars a month, it can make saving for retirement a challenge. Read More: Find Out: Personal finance expert Suze Orman understands that earned income isn't always a reality. In her recent blog, 'Boost Retirement with a Spousal IRA,' she explains how non-working spouses can still build retirement savings. The Hardest Job in the World Few would argue that staying at home to care for a child, parent or loved one isn't demanding. If stay-at-home parents were compensated for all the work they do, estimates their median annual salary would be $184,820. In reality, caregivers remain on call 24 hours a day, with no overtime, paid benefits or raises. And because they don't receive earned income, they typically can't contribute to an Individual Retirement Account (IRA). However, there is one option: A spousal IRA, which allows a non-working spouse to contribute as long as their partner has earned income. What Is a Spousal IRA? As reported by U.S. News & World Report, the IRS allows a working spouse to make an IRA contribution on behalf of a spouse who isn't working, often referred to as a Spousal IRA. For 2025, a person who is 49 years or younger may contribute $7,000 to an IRA, and a person who is 50 years old or older may contribute $8,000. This means an eligible couple could contribute as much as $16,000 combined, depending on age. With a traditional IRA, contributions are tax-deductible in the year they are made, but withdrawals in retirement are taxed. Discover Next: Can a Non-Working Spouse Contribute To a Roth IRA? Many people are aware of the tax advantages associated with a Roth IRA. Unlike a traditional IRA, where taxes are deferred until withdrawal, money contributed to a Roth IRA is done with income that has already been taxed. Therefore, there aren't any immediate tax benefits, but when the money is withdrawn, it is done 100% tax-free. While this may be ideal for some couples, there are limitations as to who can contribute to a Roth IRA. As noted in Orman's article, the joint modified adjusted gross income (MAGI) must be below $236,000 for a couple to contribute the maximum to a Roth IRA in 2025. Can All Non-Working Spouses Contribute To an IRA? While many non-working spouses with a spouse who has earned income will be able to take advantage of a spousal IRA, there are some rules. First, the couple must be married and file a joint federal tax return. Second, the tax return must show earned income from at least one spouse. It is important to note that while many people may be able to take advantage of a Spousal IRA, it is always best to consult with a tax professional before filing. A tax expert can help provide guidance on the legalities behind a Spousal IRA and ensure that all qualifying criteria are met. More From GOBankingRates New Law Could Make Electricity Bills Skyrocket in These 4 States I'm a Self-Made Millionaire: 6 Ways I Use ChatGPT To Make a Lot of Money 5 Strategies High-Net-Worth Families Use To Build Generational Wealth 4 Housing Markets That Have Plummeted in Value Over the Past 5 Years This article originally appeared on Suze Orman: How To Boost Retirement Savings With a Spousal IRA
Bloomberg
11-08-2025
- Business
- Bloomberg
Germany Property Crash Leaves Pension Funds Reeling From Private Credit Losses
It was a 'trailblazing' project - and for the two small pension funds that helped finance it, a chance to prop up the retirement savings of dentists and pharmacists in rural northern Germany. Yet shortly before 'Canyon,' an office development wedged between Frankfurt's red light area and its banking district, was scheduled to be completed, a pile of sand with a pop up beach club is all they have to show for their investment. That and tens of millions in writedowns that have forced them to tap reserves.
New York Times
09-08-2025
- Business
- New York Times
Private Equity in Your 401(k). What Could Go Wrong?
The private equity industry, facing a slowdown in exits and fizzling returns, has long coveted a $12.2 trillion pool of money: retirement savings. Now it is one step closer to managing some of the funds in Americans' 401(k)s and related plans. President Trump signed an executive order on Thursday that clears a path for plan managers to add private equity and other alternative assets to retirement savings accounts. The administration's stance 'marks a major step forward in modernizing the retirement plans of everyday savers,' Jaime Magyera, the head of BlackRock's retirement business, said in a statement to DealBook. (BlackRock, the world's largest asset manager, earlier this summer announced a big push to include private equity and private credit in its retirement plans.) Taking private assets mainstream would mark a notable shift: Private market investments, while not technically barred from 401(k) plans, are riskier than publicly traded stocks and bonds. They have traditionally been seen as unfit for defined contribution plans. Consumer groups, lawmakers and some investment advisers have raised alarm about the potential harm to everyday investors. Those concerns have been front and center. But observers say the private asset industry, which has lobbied hard for the opening, could also expose itself to risks. Trump's much-anticipated order does not change policy. But it directs the Labor Department, which oversees retirement plans, to re-evaluate its fiduciary guidelines and clarify its position on the proper process when offering funds that include alternative assets. Notably, the cryptocurrency and real estate industries are also poised to benefit. Proponents say the order expands investment opportunities for retirees. It might make some plan sponsors realize that these assets 'can be part of a prudent asset allocation of a 401(k) plan,' Erin Cho, a partner in the law firm Mayer Brown's employment and benefits practice, told DealBook. Want all of The Times? Subscribe.
Bloomberg
08-08-2025
- Business
- Bloomberg
Private Equity Braces for a Strange Bedfellow in 401(k) Order: Crypto
The private equity industry has a novel bedfellow in a White House executive order that will pave the way for American workers' 401(k) savings to go beyond stocks and bonds. When President Donald Trump signed a directive to give the overseers of employees' retirement savings more legal cover to go into 'alternative' asset classes, the list of investments that got his blessings included the usual suspects like private equity and real estate. Crypto made the cut, too.
