Stay-at-Home Spouse? Consider a Spousal IRA

Published By James Bogart
On April 24, 2020

Last Updated On: April 23, 2024

In a two-parent household, it’s common for one spouse to stay home with the children. This can even be a good financial decision, given the increasing cost of childcare. However, it can create a potential problem when it comes to retirement; stay-at-home spouses don’t have the same access to employer-sponsored retirement plans.

Plus, since Social Security is determined based on how long you work and the salary of your highest-earning years, stay-at-home spouses may qualify for a much smaller benefit. Depending on the working spouse’s benefits, a stay-at-home spouse may be able to opt into spousal benefits instead, which are half of the principal spouse’s benefits.

One solution that can help stay-at-home spouse’s plan for retirement? A spousal IRA.

What is a spousal IRA?

A spousal IRA is any IRA account funded for a spouse who earns little or no income. A spousal IRA doesn’t necessarily need to be a separate account—you can use the same IRA you contributed to while working. The funds simply stay separate from your spouse’s IRA account from a tax perspective.

In 2024, for example, you can contribute $7,000 per year to an IRA if you’re younger than 50. You must have earned income to qualify. A married couple younger than 50 would be able to contribute $14,000, regardless of whether both spouses earned income, or just one.

Participation in employer-sponsored retirement plans (such as 401(k)s) can impact the contribution limits around spousal IRAs and whether contributions are tax deductible. (This applies to Roth accounts and traditional accounts.) Be sure to check the most recent IRS guidelines; they’re updated annually.

If you’re curious about whether you qualify, or want to know more about IRS guidelines in the current tax year, contact a Bogart Wealth Advisor.

IMPORTANT DISCLOSURE INFORMATION:

Please remember that past performance is no guarantee of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Bogart Wealth, LLC [“Bogart Wealth”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level (s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Bogart Wealth. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Bogart Wealth is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Bogart Wealth’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at bogartwealth.com

Please Note: Bogart Wealth does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Bogart Wealth’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.
Please Remember: If you are a Bogart Wealth client, please contact Bogart Wealth, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently.
Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.