Important Information for Kimberly-Clark Professionals to Know About Their IRA Accounts

Healthcare Provider Update: Healthcare Provider for Kimberly-Clark: Kimberly-Clark does not typically provide direct healthcare services as a core aspect of its business. However, it does offer healthcare products under its brand portfolio, which includes items like medical gloves and protective wear used in various healthcare settings. The company primarily focuses on consumer products in personal care and hygiene, and while it may collaborate with organizations in the healthcare sector, it is not a traditional healthcare provider. Potential Healthcare Cost Increases for Kimberly-Clark in 2026: As we approach 2026, Kimberly-Clark and its consumers may face significant increases in healthcare costs due to anticipated steep hikes in health insurance premiums. The Affordable Care Act (ACA) marketplace is expected to see rate increases exceeding 60% in certain regions, driven by factors such as rising medical costs and potential loss of enhanced federal premium subsidies. Without intervention, these escalating premiums could drastically affect affordability for millions, with some policyholders at risk of experiencing up to a 75% rise in out-of-pocket expenses. This perfect storm of rising costs could pressure both Kimberly-Clark's employees and consumers, impacting the overall demand for its healthcare-related products. Click here to learn more

For Kimberly-Clark employees nearing retirement, tools like spousal IRAs and backdoor Roth conversions can increase retirement savings flexibility - but planning ahead can prevent tax surprises - said Wesley Boudreaux, of The Retirement Group, a division of Wealth Enhancement Group.

'Kimberly-Clark professionals should optimize their IRA contributions now that the Estate Tax Exemptions are changing,' said Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement Group.

In this article, we will discuss:

1. Contribution limits and income thresholds for IRAs.

2. Spousal IRA benefits & strategies.

3. Top tax considerations and planning for high earners: the pro-rata rule and Roth conversions.

Individual Retirement Accounts are a major component of retirement planning and provide many tax advantages. But understanding IRA contributions in the context of income limits helps Kimberly-Clark professionals plan for retirement.

Understanding IRA Contribution Limits

For those planning a retirement, IRA contributions are capped annually. Such limits are recalculated periodically for inflation and other economic factors. For example, in 2023 the standard IRA contribution limit is USD 6,500 - up from USD 6,000 for those 50 and older - respectively. These limits will rise to USD 7,000 and USD 8,000 in 2024.

IRA Income Thresholds for Contributions.

Whether you can contribute directly to a Roth IRA or receive a tax deduction on a traditional IRA contribution is determined by your income. Those thresholds may impose restrictions on high earners. For example, by 2023, a married couple filing jointly must earn less than USD 218,000 a year for full Roth IRA contributions and be phased out with income greater than USD 228,000.

But fewer know that there's also an income floor for IRA contributions. Your earned income must at least match your IRA contribution. Especially true for those with lower earned income due to retirement or reduced hours.

The Spousal IRA: An Advantage for Couples

The spousal IRA provision is useful for married couples when one partner has little or no earned income. This rule doubles the IRA contribution potential of a spouse with enough earned income to contribute to an IRA in the name of the non-earning spouse. This is a plus for couples where one partner is retired or unemployed.

High-Income Couples: Navigating Roth IRA Contributions

High earners may be limited in contributing directly to a Roth IRA or receiving tax deductions for traditional IRA contributions. Here is where a spousal backdoor Roth IRA comes in handy. They let top earners go around those limits by first contributing to a non-deductible traditional IRA and then converting it to a Roth IRA.

Pro-Rata Rule and Tax Considerations for Kimberly-Clark Professionals.

Know the pro-rata rule of the IRS for backdoor Roth IRA conversions. The proportion of pre-tax versus after-tax money in your IRAs may cause a tax bill during the conversion process. Know the tax consequences of a spousal backdoor Roth IRA and plan for them accordingly.

Evaluate whether additional savings are needed.

Although maximizing IRA contributions can be a great strategy, you still should consider whether additional savings are needed. When you and your spouse contribute to employer-sponsored retirement plans, additional IRA contributions may outweigh other financial goals and needs.

Diversifying Retirement Income

Spousal IRAs help diversify your retirement income sources. For instance, if most of your retirement savings are currently invested in pre-tax accounts like 401(k)s, contributing to a Roth IRA can earn you tax-free income in retirement while giving you more freedom with your retirement planning.

Spousal IRA Contributions - Making the Decision.

If one partner has little earned income, a spousal IRA may be a way to increase retirement savings. Particularly if traditional IRA deductions are not possible or if direct Roth contributions are capped by income. In such situations, the backdoor Roth method is an option.

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Using IRA contributions wisely, including understanding spousal IRAs and backdoor Roth IRAs, is critical to retirement savings. And this is particularly true for people transitioning to retirement or who are already retired - matching savings to present income levels and goals for the future. Keep up with these retirement savings tools and review your finances often.

For Kimberly-Clark professionals over age 60 and especially those with substantial assets, knowing the current Estate Tax Landscape is critical. The federal estate tax exemption stands at a record USD 12,920,000 per person - or nearly USD 26 million for a couple - as of 2023. That exemption will be halved by 2026 unless Congress intervenes. So big estates should take advantage of this exemption as soon as possible. That might mean completely gifting or creating irrevocable trusts that use up the existing exemption while reducing future estate tax liability.

A yacht sailing through shifting tides and currents is similar to handling IRA contributions and estate taxes. Like a sailor who knows the sea to navigate, Kimberly-Clark professionals approaching retirement or retired must understand IRA limits, spousal IRA rules, and how estate tax exemptions are changing. Much like how the tides change direction on a yacht, changing tax laws and IRA regulations can change the direction of one's course toward a secure and prosperous Kimberly-Clark retirement.

Sources:

1. Saunders, Laura. 'Your Guide to Taxes for Retirees and Retirement Accounts.'  The Wall Street Journal , 20 Feb. 2025, pp. 1-3.

2. 'Retirement Topics - IRA Contribution Limits.'  Internal Revenue Service , Aug. 2024,  www.irs.gov/retirement-plans/plan-participant-employee/ira-contribution-limits .

3. Chen, James. 'Backdoor Roth IRA: Advantages and Tax Implications Explained.'  Investopedia , 15 May 2015,  www.investopedia.com/articles/retirement/051515/backdoor-roth-ira-advantages-and-tax-implications-explained.asp .

4. Lake, Rebecca. 'A Guide to the Pro-Rata Rule and Roth IRAs.'  SmartAsset , Nov. 2024,  www.smartasset.com/retirement/guide-to-the-pro-rata-rule-and-roth-iras .

5. Smith, John. 'The Spousal IRA.'  The FI Tax Guy , Jan. 2024,  www.fitaxguy.com/spousal-ira .