How does spousal IRA work?


Since IRAs are by definition individual retirement accounts, they cannot be combined as joints accounts.

If you are the only breadwinner in the family and would like to provide a retirement nest egg for your spouse, you can establish a spousal IRA which you can make contributions to, on behalf of your non-working partner who would otherwise not be eligible for a traditional IRA.

Requirements for Making Spousal IRA Contributions

In order to qualify for a spousal IRA, you need to meet the following requirements:

  • You must be married.
  • You have to file a joint income-tax return.
  • Your earnings must be at least equal to the amount you contribute to your individual retirement accounts.
  • No age restrictions apply to Roth IRA contributions. However, if you wish to fund a traditional IRA on behalf of your spouse, he/she must be younger than age 70 ½ in the year for which contributions are made.
  • Your spouse is subject to the same contribution limits as you, regardless of their income. Tax year 2009 has a contribution limit of $5,000, which means that you may contribute a maximum of $10,000 total to both IRAs. If you are age 50 or older by the end of the year for which the contribution is being made, the limit is increased by the catch-up amount which has a combined contribution limit of $2,000.
  • There is no limit on your compensation to fund a traditional IRA. However, if you wish to be eligible to contribute to a Roth IRA for yourself or your partner, your modified adjusted gross income must be less than $169,000. For married couples with modified adjusted incomes between $159,000 and $169,000, the tax deduction is phased out.
  • IRA contributions must be made in cash. You do not need to pay your full contribution amount in one increment: contributions may be made in small amounts.
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