Lawrence Bleau wrote:
- quote -

"If you're married and you file a joint return, you can make a regular
(non-rollover) contribution to a Roth IRA even if you have little or no
taxable compensation income. ... For most people this rule works out
very simply: if your spouse has over $6,000 of compensation income and
you file jointly, you and your spouse can each make up to $3,000 in
non-rollover contributions to an IRA."

http://www.fairmark.com/rothira/spousal.htm

Of course this needs to be updated to $4K/$8K for 2005-2007.

--
Mark Freeland
nBeOwXs[at]pacbell.net

Lawrence Bleau wrote:

- quote -

Since long term capital gains are taxed at a lower rate than ordinary
income, it may make sense to realize the capital losses one year,
offsetting up to $3000 of ordinary income, and to realize the capital
gains in a later year. Capital losses beyond $3000 can be carried
forward to future years, and they can be used to offset capital gains.

If you can take money and put it into a Roth, without paying taxes
because of sales of old investments, do so.

You can keep doing so as long as one spouse has income.

I'm employed, have been for 29 years, nearing retirement. My spouse
has another 13 years to go. I'm looking for ways to build up
retirement assets. We're both age ~50.

I realize I cannot contribute to any IRA, including a Roth IRA, once I
retire (unless I work at another job, of course). I've already maxed
out my Roth IRA (a stock fund) for this year; my spouse has not (her
Roth IRA is a life cycle fund). I don't want to dip into reserves
just to invest, though.

I'm considering selling some of two mutual funds I own in taxable
accounts - one at a gain and one at a loss so I don't pay any CG taxes
- and having my spouse put that money into her Roth IRA. To answer
the first question: I trust her implicitly, so there's no issue of
this becoming "her" money.

I'm essentially converting taxable to tax-free investments of a
similar type (not identical), thus not tapping reserves. I had not
planned to tap these taxable accounts until our joint retirement
anyways.

What do you think of this strategy?

If I retire in a couple of years, we could keep doing this, couldn't we?

TIA

Lawrence Bleau
University of Maryland
Physics Dept., Space Physics Group
301-405-6223
bleau[at]umtof.umd.edu