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Subject:  Re: Retirement investing Date:  11/5/2008  3:21 PM
Author:  Fuskie Number:  64415 of 95242

My spouse contributes to her employer sponsered retirement plan and we buy health insurance through her employer. I guess that eliminates her IRA option.

Hopefully you had DW add you to her health insurance plan. I believe your losing your full time job qualifies as a life event that would allow it. Or be sure to add yourself now during open enrollment for 2009. I assume the baby (congrats!) is also on mom's healthcare plan.

You have already read that you can make a $5k Roth IRA option for DW even while she is participating in her employer-sponsored retirement savings plan. It is not tax deferred but any earnings will be tax free when distributions are taken upon retirement, so it is tax advantaged.

This year I have worked W2 for an employer with a 401k, W2 for one without benefits, and 1099 for a couple employers (I am contracting too). My options were contributing to the 401k (with $0.25 on the dollar matching contributino for the first 4%), plus I will be elligible to make a RIRA contributin and also a contribution to my SEP IRA, which was established the last time I went contracting. I have since rolled over the $500 resulting from the 401k to my Traditional IRA (does not count against my $5000 annual contribution limit).

Note that the amount you can contribute to a SEP IRA is based on the amount of self-employment (1099 contract) income you take in during the year. I think it is around 40% with a maximum but its been a while since I have scoped it out and I am at work and can't really do the research right now. The SEP IRA is tax advantaged with the ability to deduct contributions in the calendar year in which they are made, and monies can be invested through your favorite broker just like your RIRA and TIRA accounts.

Who is also remembering to set aside 25% of his 1099 income to cover income tax liability and is setting aside additional funds to cover RIRA and SEPIRA contributions next April...
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