Retirement Planning — new extra income
Terry, I am retired, living mainly on Social Security and 401K distribution. This year I started doing some contract work which will bring in about $25,000. I read that I could shelter $7000 in an IRA, and also another $7000 in a separate IRA for my wife. My question: Should I do that since I don’t need the extra money to live on?
Terry Says
Honestly, since you’re in such a low tax bracket you don’t need a deductible IRA. And if you do a Roth IRA you’d need to wait 5 years to take out any gains. So I think at this point you would be better off just adding it to your savings account — even though the rates are so low.
