Two common questions this time of year 

• Can I establish a IRA account for my non working spouse? 
• Does my investment income allow me to contribute to an IRA?

Bankrate.com provides answers.

Speaking of income, you must earn money to open any IRA. That means your only income can't be from unearned sources, such as investments. You must get paid wages, a salary, tips, professional fees or bonuses.

There is an exception that allows Roth accounts for nonworking spouses. If you and your spouse file a joint return but one does not work, the employed spouse can open and contribute to a Roth IRA for the unemployed partner.

Generally, the contribution limits for a spousal IRA are the same as for the account held by the working wife or husband. Check Chapter 2 of IRS Publication 590, Individual Retirement Arrangements for complete guidelines on opening a Roth spousal IRA.

Have you visited the Women's Institute For A Secure Retirement (WISER).  This is a non-profit group that focuses on some of the special issues that women face planning for retirement.  It's a great website with helpful tools and information.   Read 10 Ways Women Baby Boom Women (And Men) Can Save Themselves From Retirement Poverty!  It's a checklist we all need to review periodically.

#3 on the checklist - Learn About Various Sources of Retirement Income

Workers misunderstand what their primary sources of income in will be in retirement.  Social security is the most important source of income for many people, but before retirement, they tend to vastly underestimate its importance.

Last month General Motors announced its plans to freeze pensions and reduce health-care benefits for salaried employees.  Today GM offered buyouts to all of its 105,000 hourly employees.  CNNMoney shows what GM will be offering.

Workers will be offered a $35,000 payment if they agree to retire early. Workers who promise to sever all ties with GM — leaving the company with no retirement benefits — will get $70,000 to $140,000, depending on time with the automaker.

In a related agreement, GM will offer $35,000 retirement buyouts to 13,000 workers at bankrupt auto supplier Delphi (DPHIQ). Another 5,000 Delphi workers will be eligible for jobs at GM.

Lifecycle funds are getting a lot of attention.  Many IRA providers offer these funds and the Government Thrift Savings Plan recently added these funds to their list of investments.  Financial columnist Jane Bryant Quinn proves some insight.

Investors who use lifecycle funds in their 401(k)s, even for just part of their savings, earn higher returns than those who don't, according to performance studies by the consultant Hewitt Associates. If that doesn't hook you, nothing will.

More than half of the larger 401(k)s offer lifecycle funds—an amazing rate of acceptance for a product that's just 10 years old. By early next year, Hewitt expects to see them in as many 65 percent of plans.

If you're planning on converting your Traditional IRA or Rollover IRA into the Roth this year, financial columnist Humberto Cruz gives some helpful tips and points out the necessity to pay estimated taxes if you're retired or self employed.

Many financial advisers recommend that people who have a traditional IRA and are currently in a low tax bracket consider converting all or a portion of it to a Roth IRA. To be eligible, your modified adjusted gross income on any year you convert, not counting the amount converted or IRA required minimum distributions, cannot exceed $100,000.

If you don't withhold enough or don't have money withheld at all, as is the case if you are retired and receiving investment income or are self-employed like me -- you must make estimated tax payments four times during the tax year, by April 15, June 15, Sept. 15 and the following Jan. 15.

Caregiving can be difficult in any situation, but it is especially difficult if you don't live near your loved one. According to the National Institute on Aging (NIA), approximately 7 million adults provide caregiving for loved ones who live an hour or more away. Long-distance caregivers have to deal with many of the same issues as caregivers who live nearby, with the added difficulty of doing everything over the phone and on occasional visits.

Most financial experts suggest we can withdraw 4-5% of our portfolio each year in retirement.  Last Sundays Parade Magazine illustrated how big a personal nest egg you'll need at retirement to generate those withdrawals.  Here's the article.

To Withdraw 4-5%               You Need to Have Saved

 $16,000-$20,000                            $400,000

 $20,000-$25,000                            $500,000

 $28,000-$35,000                            $700,000

 $32,000-$40,000                            $800,000

 $36,000-$45,000                            $900,000

 $40,000-$50,000                            $1 Million

CNNMoney gives us the update.

Unfortunately, however, this is one of those cases where a perfectly good strategy may run up against the shoals of hard reality -- the hard reality in this case being that employers aren't exactly jumping on the Roth 401(k) bandwagon.

Indeed, a recent survey of more than 220 large companies by benefits consulting firm Hewitt Associates found that only 13 percent of companies say they are very likely to add a Roth 401(k) this year.

Apparently, employers are worried that adding a Roth 401(k) might be a cumbersome administrative undertaking, plus they're concerned employees might not understand and use it.

Just a reminder......If you reached age 70 1/2 last year, April 3, 2006, could be an important deadline. That's the last day you can take your 2005 required minimum distribution, or RMD, from your traditional IRAs. If you miss that deadline, the penalty could be a 50 percent  tax on the amount you should have withdrawn.  Normally the deadline is April 1 which falls on a Saturday this year.   Your IRA custodian will calculate the amount and we've provided the Uniform Table for Life Expectancy to help with the calculation.

Some of your weekends this month may involve income taxes.  Here's some basic tax planning offered by BusinessWeek online.

In general, Uncle Sam taxes a traditional pension, or withdrawals from a 401(k) or traditional IRA, at the same rate as money you earn from a job. The amount you pay -- anywhere from 10% to 35% -- will depend on your tax bracket.

As American employers continue to assess and reduce their retiree health care benefits, Fidelity estimates that a 65-year old couple retiring today will need $200,000 to cover medical costs in retirement.

The retiree health care cost estimate is calculated annually by Fidelity Investments. The 2006 estimate rose 5.3 percent from the 2005 estimate of $190,000. Since Fidelity's initial estimate of $160,000 in 2002, the number has increased an average 5.8 percent per year.

YahooFinance provides us the information.