Money Girl Who's Eligible for a Spousal IRA?
Jan 29, 2025
Dive into the world of spousal IRAs and discover who qualifies for this smart savings tool. Learn about the unique tax benefits that come with these accounts, as well as contribution limits and practical examples to boost your retirement strategy. Find out how to easily set up a spousal IRA and link it to a bank account for seamless contributions. Explore different investment options tailored to your risk tolerance and financial goals, ensuring you and your spouse can maximize your retirement savings.
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Understanding Spousal IRAs
- A spousal IRA is a rule allowing a working spouse to contribute to an IRA for a non-working or lower-earning spouse.
- It applies only to married couples filing jointly, and IRAs are always individually owned.
Traditional vs. Roth IRA
- Traditional IRA contributions are pre-tax, reducing taxable income now, but taxed upon withdrawal.
- Roth IRA contributions are after-tax, offering tax-free withdrawals in retirement.
Spousal IRA Contributions
- If filing jointly, each spouse can fully fund an IRA, even if one is a stay-at-home parent.
- Those under 50 can contribute $7,000 each, while those over 50 can contribute up to $8,000.