Spousal IRA

If you’re married and you want to put more money away for retirement you may want to look into a spousal IRA. A spousal IRA is an IRA that can be opened for a non-working or non-participant spouse. A non-participant spouse means a husband or wife who is working but does not have access to a retirement plan through his or her employer.

The IRS states that you must have earned income to contribute to an IRA. With a spousal IRA, you don’t need to have any earned income at all, but your spouse does. The spouse with earned income can contribute to his or her own IRA and also put funds into the spousal IRA. The IRS allows up to $6,000 in contributions to an IRA in 2019 for individuals who are under age 50. For those who are 50 or older, the limit in 2019 is $7,000.

 With a traditional IRA, when you make contributions to the account, those funds may be tax-deductible. When you withdraw from the account during retirement, the amount you take out will be subject to taxes. For a Roth IRA, you’ll make contributions to the account with money that you’ve already paid taxes on. When you make withdrawals in retirement, those funds won’t be subject to additional taxes.

Taxes play a key role when deciding between a traditional spousal IRA or a Roth spousal IRA. To open a spousal IRA, call my office 320-679-5183.