Traditionally, an individual is only able to contribute to a Traditional or Roth IRA if they earn an income (and are within the income thresholds for the Roth). But the Spousal IRA ruling by the IRS makes an exception to the traditional requirement for IRA contributions.
Spousal IRA’s are not separate or special accounts that need to be opened and deemed “spousal”. The spousal IRA is less of an account and more of a ruling.
The Spousal IRA ruling notes that if there is a couple where only one spouse works, the non-working spouse will be permitted to contribute to an existing or new Traditional or Roth IRA, assuming the couple files a joint tax return.
Note: All IRA and Retirement specific investment accounts are individually, not jointly, owned.
Let’s say I work at a company and make $150,000 per year and my husband stays at home with our boys. Per the Spousal IRA rules, I will contribute up to $6,000 into my Roth IRA and my husband will contribute $6,000 into his Roth IRA. Whether you have an existing IRA account or are opening a new one – it does not matter.
If you are a stay at home wife, husband, mom or dad and as a family you have made the decision to stay home and not earn an income through traditional employment – then I would be prioritizing this retirement option.
The decision to stay at home is a wonderful one and serves so many purposes with many benefits. However, it does not come without financial sacrifice. With that said, by contributing to your IRA, made possible by the Spousal IRA ruling, you are creating a protective asset in your name AND getting the benefit of investing for you and your families future. Win win!
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