Lots of people have jobs where they dont earn any income.
If theyre married, a spousal IRA could be an option.
How a Spousal IRA Works
There is no special account for a spousal IRA.
Its just a regular or Roth IRA in a spouses name.
Its not titled a spousal IRA.
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Each spouse needs to have their own IRA; they cannot be joint.
All retirement accounts cannot be co-owned, Pedersen said.
Spouses can also be beneficiaries on the others account.
To contribute to a spousal IRA, a couple mustfile their taxesas married filing jointly.
Did you know?
The limit increases to $13,000 ($6,500 for each person) in 2023.
People 50 or older can make an additional $1,000 catch-up contribution in 2022 and 2023.
The working spouses income must equal or exceed the total amount of the contributions for both spouses.
You cannot contribute more than you earn.
Why Contribute to a Spousal IRA?
A spousal IRA helps accelerate a couples savings for retirement.
The amount of money necessary for retirement varies depending on the couples lifestyle.
After 25 years, you would end up with more than $330,000, Pedersen explained.
Pedersen said there is only one main drawback to a spousal IRA.
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