With all the hoopla and news surrounding the recent ruling regarding a gay marriage ban in California, it isn’t surprising that I received this reader question:
This question seems to be one that many are asking. And while it is true that individuals can open their own IRAs, it is not possible unless you make money at what is recognized as a real “job.” Staying home with the kids doesn’t count. Which is why the spousal IRA was introduced.
My partner of 13 years and I live in California, and we are planning on getting married as soon as possible. She stays home and keeps things running smoothly while I work. We’d really like to get her a spousal IRA when we marry. Will this be possible?
Unfortunately for those in gay relationships, the spousal IRA won’t take effect. In 1996, in the “Defense of Marriage Act,” Congress made sure that no matter how states define marriage, for Federal purposes a “spouse” can only be a member of the opposite sex.
It really does seem unfair that those in committed relationships can’t enjoy the same financial benefits as heterosexuals, just because of their sexual orientation.
Mrs. Micah does point out that there is an advantage for gay couples where both spouses work:
Unfortunately, if you want one partner to stay at home, this doesn’t really help, either.
Not being recognized by the federal government is a potential advantage here, if your spouse makes too much for you to have a Roth IRA. Because they don’t recognize the marriage, your spouse’s earnings won’t exclude you from contributing. It doesn’t really mitigate the other disadvantages, but it may help you save for retirement.
What do you think about financial benefits for those in gay partnerships?