Do you qualify for a SEP IRA? You seem to be partially self-employed now.

http://en.wikipedia.org/wiki/SEP_IRA

Or even an Individual 401(k)? (allows even more to be put aside pre-tax)

Fidelity has them, initial paperwork is a bit crufty, but it's a good deal once you have one)

Don't you just hate that? The income limits for Roth IRAs, I mean. For all of Bush's preaching that Social Security needs to go to private accounts and yadda yadda, I really wish he'd actually get around to the tax reforms like he promised. Fixing little chesnuts like this, the AMT, and just the huge, Gordian mess that is the American tax code would go a long way in helping average Americans save their own money for retirement.

Taupecat - I would hardly call someone earning more than AGI of $160,000 "an average American". I wish everyone would have such problems. While I think there is a strong argument to simplifying the tax code - I get the feeling when I talk about this, the people who want changes to the tax code are mostly the well off. You have to remember that if your family earns above $100K you are probably in the top quartile of income earners in this country (not sure of the statistic but it is probably ballpark). The greatness in this country is that while income disparity has always existed it wasn't as pronounced as many other places. I get the feeling that is changing. Sadly simplifying the tax code will not help the vast majority of Americans. What is needed in my mind is a more equal distribution of wealth in the jobs that average people have - pay more to teachers and firefighters and middle level employees of companies. While this might seem bad for the wealthy in the short run (increased or unchanged taxes) it will be best for this country in the long run and continue to develop prosperity by having more people who have "average American" jobs still have standards of living that are the best in the world.

Joe. K - Tell the teachers to teach skills in higher demand. Tell the firefighters to work part time or run a business while they have all that free time sitting around at the station. Tell the average american to not be so average, and do something that makes them deserve to be paid higher than the average american. All the jobs you metioned appeal to the emotions of the american tax payer, but they do not deserve higher pay on that logic alone. Skills and productivity drive wages, and if you don't have to use either one, then don't expect your wages to be going anywhere soon either. I know baggage handlers used to be able to raise a family on their wages and even send their kids to college, but we have to look at the reality of the situation. We cannot compete on a global scale with wages for unskilled labor going for $60K. Instead, not only will the baggage handler not have a job, but everyone in the whole company will eventually be finding a new job when a foreigner buys the airline and sells it off in chunks.

Thank you Jeff and Catilin. Yes, I need to study these options. Will post results online.

Find your place in the world. I think you'll find that even at a teachers/firefighter's salary, you are still rather wealthy compared to the rest of the world.

http://www.globalrichlist.com

The global rich list is interesting but probably irrelevant. But Joshua, people who choose to be firefighters know the salaries they're expected to earn, and those who work for a cause (whether it's saving lives or non-profit, for example) understand that there's not the same kind of money as there is in being an upper-level executive in a corporation.

You're confusing "skills and productivity" -- of which you say there should be more education -- with "desire and means to get ahead in the corporate/business world."

I'm curious as to how to figure out the salary someone "deserves" in your mind. Generation of corporate profits?

If the average American salary is $38,428, what is it about teachers that makes you think they should make less? This puts a salary of $150,000 way above average. When one is immersed in the corporate world, it's hard to understand that because there are a whole lot of people making around that much. It's difficult to see outside of one's close circle.

I'm completely fine with limiting Roth IRA and tax-favorable contributions for people with high salaries. They have the means to save for retirement without assistance from the government.

I linked to the source of the average salary figure but my HTML was stripped:

http://usgovinfo.about.com/b/a/009620.htm

Believe me, I didn't intend to make this post a debate about class warfare :-) I totally support the limit -- at the very least, it is a good challenge to find alternative strategies to keep more money. Keep tuned for my next series.

Joe K. - A lot of it depends where in this country you live. Granted, $150K in MOST parts of this country is indeed high income, but in higher cost of living areas (New York, San Francisco, Seattle all come to mind), $150K doesn't take you as far as you'd think. And that's another problem with the tax code, it's one size fits all which is certainly not the case in this country. Just compare median home prices in NYC, Des Moines, Honolulu, etc. And another point -- the income limit for a full Roth IRA contribution is $95K for single, $150K for married filing joint. What kind of math gets 2 X $95K = $150K ??? It just doesn't make sense to me. These income limits are arbitrary and serve no purpose considering how little $3K is to one's overall retirement plan really (it's a number only slightly adjusted from 1980's levels). No, I don't want to debate the socio-economic class structure of this country either; I just want the tax code to make sense.

Even though one can't contribute to a Roth past the $160k mark..you can still contribute to a traditional IRA (only catch here is that the contribution is not deductible off your taxes; however: the sum still grows tax free like a traditional IRA. Again..the only difference here is that you can't deduct the upfront contribution...but on the backside, you get taxed when you withdraw the amount (just like you would with the typical traditional IRA).

Key here: you don't get to deduct on the front-side and you don't withdraw tax free on the backside..but it's still away to shelter more income for tax-free growth during the interim.

Midwest Mike

I'm really tired of reading all these articles about people making $120K, $150K, $200K and how they're "barely getting by" due to high cost of living, or high home prices, or something else. The simple fact is, if they are having financial troubles, they're living beyond their means. I absolutely guarantee someone making that much (even with a 2.5 kid family) could survivce financially ANYWHERE in the country. They just need to stop living like they have a net worth of $20M. Further, the Roth IRA phase out amount should really be lowered -- it's too high as it is. People making that much have enough advantages as it is -- they really don't need another tax break when their high-priced accountant has likely saved them thousands more than the average taxpayer though loopholes.

A taxed brokerage account can sometimes make more sense than plugging more into an IRA that is non-deductible and will be taxed as ordinary income upon withdrawal. LT cap gains would max at 15% at todays rates.

drury - I totally agree with you on your point.

My wife and I have two large buckets (with many little buckets, ie. accounts). The two large buckets are PRE-TAX retirement savings and POST-TAX retirement savings.

The pre-tax accounts are for when we are actually retired and the post-tax accounts are for our early/semi-retirement years. i.e. when we hit 50 (or sooner).

I have a 401k and a SEP but am priced out of ROTH and deductible IRA's and so a post-tax retirement account was my best next option.

On my post-tax accounts I'm using some great tax efficient ETF strategies to minimize tax impacts.

-Wes