There are many options when it comes to retirement planning. A number of retirement plan options are available from the SEP retirement plan for the self-employed to the ulitmate Roth 401(k) offered through companies. But what if you want to set up a retirement account for an unemployed spouse? Can you do that?
Yes you can. It’s called a spousal IRA. This is a retirement plan meant for those that do not work at a job outside the home (though we all know that a “non-working spouse” is hardly non-working!). This type of retirement planning allows a spouse to set up an IRA, even if he or she does not have what is considered “a job.” However, the couple must be married filing jointly, and the IRAs must be set up separately.
This can be a great way to boost your combined retirement savings. A spousal IRA is considered to be separate from the working spouse’s IRA, so it is eligible for its own $4,000 per year contribution (or $5,000 for those over 50). This means that you can double the amount that you put into an IRA if you open one for a non-working spouse. A spousal IRA can be a great addition to your overall retirement planning. However, be aware that there are income limitations for the Roth IRA.