Spousal IRA Can Help Boost Retirement Savings

KALAMAZOO, Mich. - May 18, 2015 - PRLog -- If you are part of a married couple in which one of you does not receive earned income, you may be able to benefit from a spousal IRA. Here are the answers to some basic questions about this retirement savings vehicle.

What is a spousal IRA?

A spousal IRA is an IRA that the working spouse can fund on behalf of the non-working spouse. You and your spouse must file a joint income tax return to be eligible to establish a spousal IRA.

Does contributing to a spousal IRA lessen the ability to fund my IRA?

No. If you have earned income of at least the amount you contribute to both IRAs, you can fully fund your own IRA and a spousal IRA. In 2015, you can contribute up to $5,500 per individual – so, for your household, you can contribute up to $11,000.

Can “catch-up” contributions be made to a spousal IRA?

If you are 50 or older, you can put in an additional $1,000 to your IRA, pushing your maximum contribution to $6,500. You can also make this “catch-up” contribution to the spousal IRA, provided your spouse is 50 or older.

Are contributions to a spousal IRA tax deductible?

If you are the working spouse, and you do not participate in an employer-sponsored plan, such as a 401(k), you can typically deduct the full amount of your spousal IRA contribution, provided the account is established as a “traditional” IRA. If you are covered by a 401(k) or similar plan, your ability to deduct spousal IRA contributions depends on your income and your tax filing status.

Can a spousal IRA be designated as a Roth IRA?

Yes. However you, as the working spouse, must meet the Roth IRA income requirements. (In 2015, if you file taxes jointly, you can contribute the full amount to a Roth IRA if your adjusted gross income is less than $183,000.)

An Edward Jones financial advisor can provide you with more information on spousal IRAs.

Edward Jones, its employees and financial advisors cannot provide tax or legal advice. You should consult your attorney or qualified tax advisor regarding your situation.