A married person with no income from working can still make an IRA contribution. But, special rules apply. See the video for details…(read more)

LEARN MORE ABOUT: IRA Accounts

CONVERTING IRA TO GOLD: Gold IRA Account

CONVERTING IRA TO SILVER: Silver IRA Account

REVEALED: Best Gold Backed IRA

The Individual retirement account (IRA) season is here again and it is important to understand the various IRA contribution rules. One of the lesser-known facts about IRAs is spousal IRA contributions. Many investors remain unaware that they can contribute to their spouse’s IRA account, even if the spouse is not working.

Generally, IRAs are available only to individuals who have earned income. However, a spousal IRA allows a non-working or low-earning spouse to make contributions to an IRA account solely based on the other spouse’s income. The contribution limit for a spousal IRA is the same as a regular IRA, which is $6,000 per year (or $7,000 for those over the age of 50).

To make a spousal IRA contribution, the couple must be legally married and file a joint tax return. The working spouse must have earned income that is equal to or greater than the total contribution made to both their IRA and their spouse’s spousal IRA for that tax year.

It is important to note that spousal IRA contributions are deductible or not based on the same income limits that apply to regular IRA contributions. If the working spouse is covered by a retirement plan at work, the amount of the IRA deduction may be limited based on income. If the working spouse is not covered by a workplace retirement plan, the IRA contribution is fully deductible, subject to the contribution limit, and income limits.

Spousal IRA contributions can be particularly useful for couples where one spouse is not working, especially if the working spouse is already maxing out their own IRA contributions. In this situation, the couple can maximize their retirement savings potential by contributing to a spousal IRA, which can grow tax-free until retirement.

In conclusion, spousal IRA contributions are an often-overlooked option for couples looking to save for retirement. It is important for couples to understand the eligibility criteria, contribution limits, and tax implications of a spousal IRA before making any contributions. By working together and taking advantage of all available retirement savings options, couples can give themselves the best chance of achieving their retirement goals.