If you’re married and don’t earn an income, did you know you can still have an IRA?
It doesn’t matter if you’re unemployed, a stay-at-home-spouse, or run your own part-time business, you qualify for a spousal IRA or Individual Retirement Account.
Never heard of it? Well, it isn’t a different kind of IRA; it’s a rule that allows a non-earning spouse to have a traditional or Roth IRA and have the benefits of a tax-advantaged retirement account. To qualify, you must be married and file taxes jointly.
Also see: 10 IRA Facts Everyone Should Know
How to Open a Spousal IRA
You have until your tax filing due date to fund an IRA for the prior year. For instance, if you open an IRA by mid-April 2022, you can fully fund a traditional IRA or a Roth IRA (or a combination of accounts) for 2021. The contribution limit for 2021 is $6,000; however, if you’re over age 50, you can put away up to $7,000.
So, if you file taxes jointly and have at least $12,000 in earned income, both spouses can max out an IRA. Or, if one spouse is over 50, you can contribute a total of $13,000 ($6,000 to one IRA and $7,000 to the other). And you’re both over 50, you can contribute a total of $14,000 ($7,000 for each).
If you’re ready to open an account, Betterment is one of my favorite places to invest because it’s a radically simple online brokerage. You can invest in a regular taxable account, a traditional IRA, Roth IRA, or SEP-IRA (for the self-employed).
The beauty of Betterment is that instead of having to pick specific investments (like stock or bond funds), you simply indicate how conservative or aggressive you want to be. Then, once you set your risk tolerance, Betterment customizes your portfolio from a few well-chosen exchange-traded funds (ETFs)–and they automatically rebalance so you maintain your chosen allocation.
There are no transaction fees or account minimums, which means you don’t have to save thousands to start.
Free Resource: Retirement Account Comparison Chart (PDF download)