Can a Non-Working Spouse Have an IRA?

By Elsie Dudukovich0 Comments

Some people decide to open joint checking, savings, and credit accounts after they get married.  While it is not possible to have a “joint” retirement account, it is possible for a non-working spouse to open an IRA.

IRA stands for Individual Retirement Account. Per IRS Publication 590-A, the IRA was created to be “…a personal savings plan that gives you tax advantages for setting aside money for retirement.”

Publication 590-A indicates for in the cases of spouses without taxable compensation, it may be possible for this spouse to also have an IRA if they file their tax return as married, filing jointly.  Both spouses may have an IRA if the spouse with taxable compensation earns enough taxable compensation equaling the total amount contributed to both IRAs or up to the IRS defined contribution limits if the working spouse makes more.

Although this arrangement is called a spousal IRA, it is still an IRA and follows the same rules as established in IRS Publication 590-A regarding contributions and IRS Publication 590-B regarding distributions.