Maximize the power of individual retirement accounts. You may consider doing the following.

Alimony. Payments from such are considered earned income. It can make IRA payments even if this your only salary source. Similar to income and the like, all income and deductibility caps encompassing IRAs will be implemented.

Automatic IRA Contributions. Instead of waiting for the April 15 deadline, set up automatic contributions on a monthly basis. This is a great tool to do dollar cost averaging. But make sure the salary won’t exceed the income limits if looking at a Roth IRA. People have 15 1/2 months to give IRA contributions for a certain year, resulting in lower contributions.

Catch-up Contributions. Taxpayers aged 50 and above are qualified for a catch-up contribution of additional $1,000 to the allowed $5,500. Both acceptable in traditional IRA and Roth IRA, any amount can be saved to bolster a retirement fund, especially people who lag behind.

Consolidation of Old Accounts. In some instances, combining an IRA account or two helps in organizing retirement-related matters. Several clients hold different accounts at various institutions but are not properly managed. It is advisable to open a retirement at the custodian you trust the most and roll all of these accounts to oversee the assets properly.

Financing an IRA for a Child / Grandchild. This is a good strategy for those who desire t support the education of a child or grandchild. The yearly gifting cap is $14,000 for the $5,500 cap (or the earned income, if lower than the said amount) is well confined within that cap.

Non-deductible Roth IRA Conversion. Clients with higher income can use a backdoor Roth IRA conversion by giving a non-deductible contribution to a traditional IRA and changing the amount into a Roth IRA. Minimal or no tax liability should reflect if you only have one traditional IRA. The taxes are levied on the earnings in the account between the time it is contributed and converted. No income cap is in place, but in case of holding other IRAs where the payments are on after-tax basis, the tax will be prorated percentage of the aggregate IRAs.

Spousal IRAs for Non-Working Spouses. A portion of the minimum salary of earning spouse, if the significant other is not working and staying at home to take care of children, can still be contributed to a traditional or Roth IRA. The tax should be filed jointly, enabling non-working spouses to continue saving for retirement by optimizing the tax advantages of an IRA.