I retired in 2020, but I continue to get bonuses (2021-2023) from restricted shares (RSU's). These are treated as income on my 2021 W2. I have been told that I should be able to contribute to my individual IRA ($7k) since I meet the definition of wages and income. Additionally, that should also allow me to contribute $7K to my wife's individual IRA through a spousal IRA contribution. Is this correct? turbo tax thinks so as I have completed all my entries and it has suggested I do this to reduce my tax burden. Below is what I found on the subject.
1. Whether a retiree can continue to fund an individual retirement account (IRA) primarily depends on if they have any sort of earned income. Earned income includes wages, salaries, tips, bonuses, commissions, earnings from self-employment, as well as long-term disability and union strike benefits. You cannot contribute anything that comes from other sources, such as capital gains, dividends, or investment interest.1
2.
Spousal IRAs are just regular Roth or traditional IRAs that are used by married couples. They are not joint accounts; each IRA is set up in the name of an individual spouse. For 2021 and 2022, the use of a spousal IRA strategy allows couples who are married filing jointly to contribute $12,000 to IRAs per year—or $14,000 if they are age 50 or older due to the catch-up contribution provision.1
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Income reported on form W-2 is earned income and that earned income makes you eligible for a Traditional IRA contribution for you and a Spousal IRA for your spouse.
For 2020 and later years, there is no age limit for contributing to an IRA.
For traditional IRAs, you are still subject to Required Minimum Distributions (RMD) after age 70 1/2 (if you are born before 07/01/1949) or 72 (if you are born on or after 07/01/1949).