Add to my Roth at 72 years old?

[Vagabond Keys]

Hi, generous BHs.
I'm 75% retired and make only 8000 to $12000 a year as a 1099, mostly making a few phone calls a week selling medical supplies.
I call my long time and good customers who place orders with me or call their orders in on their own.
The 3 manufacturers I represent still send me between 600 to 1500 $ per month, no taxes withheld, as with most 1099s.
My investments are mostly fixed income and some indexes at VG.
I also keep about half with a Morgan Stanley advisor, as I'm not proficient at fixed income and laddering investments.
Current assets are 600K and a house, in S. Jersey, which is paid off, Zillows at 340K; Redfin at $404K. (Those two are a whole other discussion.)
Spouse and I both took SS at 62, for about 27K.(With the cost of living raise for 2023, SS for both = just over 30K)
My question is this: My Roth, at VG, is at 70K, as I was a late bloomer to investing.
Should I contribute the max, or anything,to that Roth for 2023?
I'm in pretty good to good health, can and do easily walk 2 miles 4-5 days a week with my spouse.
Thanks for reading and suggesting.
I will pay it forward whenever I can.

[123]

Roth is after tax money, the same as in a taxable account. If you have the money in a taxable account any interest, dividends, or gains are taxable. If you have the money in any Roth account any interest, dividends, or gains are not taxable. If you have qualifying earned income and meet the income requirements Roth accounts can save a lot of taxes.

[celia]

Of course, you should continue to fund your Roth IRA (as long as either of you has compensation). Since you will pay the same taxes whether you put the money in Taxable or in Roth, it is a no-brainer to put it in Roth where it can continue to grow tax-free. You will also be less likely to spend it when it is in such an account.

Keep up the walking. That’s good exercise overall.

[FiveK]

Yes, unless it would be even better to add to your traditional IRAs. That could be the case if you are currently being hit by a high marginal tax rate on that 1099 income due to the way Taxation of Social Security benefits works.

Have you looked at that, using either "real" tax software or an applicable one of the tax estimation tools discussed there?

[Vagabond Keys]

Thank you to all responders and relevant links.
I’ll withdraw from a very low interest bank account to fund. I understand how market timing is frowned upon by many. Yet, I need to decide whether to contribute the max here in January, or to DC Avg. over 12 months.

[FiveK]

I need to decide whether to contribute the max here in January, or to DC Avg. over 12 months.

One can know only in hindsight.

See Does Market Timing Work? for some hindsight data.

[CommitmentDevice]

I vote for fully funding the Roth as soon as you can.

• Timing the market is a fools errand
• Maximizing "time in market" is a good bet

[Vagabond Keys]

Thanks for both responses. And for surprising promptness. Bogleheads are like caring brothers and sisters.

[grabiner]

Thank you to all responders and relevant links.
I’ll withdraw from a very low interest bank account to fund. I understand how market timing is frowned upon by many. Yet, I need to decide whether to contribute the max here in January, or to DC Avg. over 12 months.

How you invest is independent of when you contribute. If you want to leave the money in a bond fund (which would be better than the low-interest bank account in either taxable or Roth), you would rather have it in a Roth as soon as possible so that the interest is not taxed.

[Vagabond Keys]

Thanks David. I think I'll max out with a 2023 Roth contribution asap. Folks here have been saying, "bonds in a taxable account, stocks in a Roth."
I'm leaning toward Equity Indexing in the Roth.

[Stinky]

Thanks David. I think I'll max out with a 2023 Roth contribution asap. Folks here have been saying, "bonds in a taxable account, stocks in a Roth."

I'm leaning toward Equity Indexing in the Roth.

Welcome to the Forum!

Yes, I’d definitely put money in my Roth.

You mention contributing for 2023. Did you have enough income in 2022 that you could also contribute for that tax year (if you haven’t done so already). I believe that the window for making 2022 contributions is open until the tax filing deadline in mid April.

[Vagabond Keys]

Thanks, Stinky. Yes on the 2022 and yes on the 2022 deadline. Enjoy it "where the skies are so blue."

[Eagle33]

Do you have enough extra 2022 work compensation to fully or partially fund Roth IRA for your spouse? The same is possible for 2023?

[Vagabond Keys]

Of course, you should continue to fund your Roth IRA (as long as either of you has compensation). Since you will pay the same taxes whether you put the money in Taxable or in Roth, it is a no-brainer to put it in Roth where it can continue to grow tax-free. You will also be less likely to spend it when it is in such an account.

Keep up the walking. That’s good exercise overall.

Thank you for the no brainer, my fave words, as I often don't trust mine.
Total agreement on walks. It's good to feel good.

[Vagabond Keys]

Do you have enough extra 2022 work compensation to fully or partially fund Roth IRA for your spouse? The same is possible for 2023?

Thanks, Eagle. I've been thinking about this, but don't know how to go about it.
Spouse does not have earned income (except SS), but we do file jointly.
Of the two of us, only I have a Roth.
If Roth max is now 7500$, is any income I earned over that Roth-able for her?

Do many folks do this?

[HomeStretch]

If you start a Solo 401k plan, if eligible, you can make Roth 401k contributions based on your net business earnings from self-employment. The same self-employed net business income also allow you to make Roth IRA contributions for you/spouse. It’s a double-dip so to speak.

[Vagabond Keys]

Thanks, HomeStretch.
Net? My business expenses nearly equal net.
A Roth is a good,comfortable, plan for me and I don't really want to open up another door and complicate things.
If I earn commissions of only 12K in 2022, pre expenses and pre 1099 taxes due, does that mean I can contribute max of 7500. to my Roth
and start one for my non-earning spouse(72) with the additional $4,500?
That would be enough of a double dip for me, and tax free withdrawals as well.

[Eagle33]

If I earn commissions of only 12K in 2022, pre expenses and pre 1099 taxes due, does that mean I can contribute max of 7500. to my Roth and start one for my non-earning spouse(72) with the additional $4,500?

Yes. You can split the $12K (if that is your Net income after expenses found on your Schedule C) any way you want between you and your spouse's Roth IRAs as long as you don't contribute more than the annual limit ($7500 per individual for 2023). $7500 contributed to yours and $4500 to your spouse's, or $6000 to each of your Roth IRAs, or $4500 to yours and $7500 to you spouse's, or any amounts in between the extremes.

[Vagabond Keys]

Thanks again, Eagle.
Your words are much appreciated.
I'll recheck my Schedule C.

Good luck this Sunday,
if that's behind your moniker.