If you’re married and don’t work, 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.
Never heard of it? Well, it isn’t a different kind of IRA; it’s a rule that allows the breadwinner in a marriage to fund an IRA for a non-working spouse so they can also save for the future using a tax-advantaged retirement account.
This is an important benefit of being married, because when you’re single and don’t have income, you can’t contribute to an IRA.
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 2016, you can fund either a traditional or Roth IRA for 2015.
The maximum contribution you can make to either a traditional or Roth IRA (or to a combination of both accounts) for 2015 is $5,500. If you’re age 50 or older you can put away up to $6,500.
So, as long as you file taxes jointly and have $11,000 in earned income, both spouses can max out an IRA. Or if one spouse is over 50, you can contribute a total of $12,000 ($5,500 to one IRA and $6,500 to the other). And you’re both over 50, you can contribute a total of $13,000 ($6,500 to each IRA).
But where should you open your account? You have many choices, but here are 3 great options:
IRA Option #1: Betterment
The beauty of Betterment is that instead of having to pick specific investments (like a stock or bond fund), you simply use an allocation slider to indicate how conservatively or aggressively you want your money invested.
Once you set your risk tolerance, Betterment customizes your portfolio from a few well-chosen exchange-traded funds (ETFs)–and they automatically rebalance it so you always maintain the investment allocation you want.
There are no transaction fees or account minimums, which means you don’t have to save up thousands to get started.
IRA Option #2: Motif Investing
Motif is a simple online brokerage that allows you to invest in a taxable account or an IRA using a portfolio of up to 30 stocks that reflect an investing idea.
You can invest in dozens of motifs as is, or customize them any way you like. Each one reflects an actionable idea across different industries, trends and events.
Because you own each individual stock in a motif, you can add stocks, delete stocks or change their weightings.
IRA Option #3: Scottrade
Scottrade offers a full range of investments to choose from, including stocks, bonds, mutual funds, and ETFs for a taxable account or a traditional, Roth, SIMPLE, or SEP IRA. If you want the ability to buy just about anything on the market, Scottrade is a great choice.
Free Resource: Retirement Account Comparison Chart (PDF download)