Spousal IRA

AAA

DEFINITION of 'Spousal IRA'

A type of individual retirement account that allows a working spouse to contribute to a nonworking spouse's retirement savings. A spousal IRA creates an exception to the provision that an individual must have earned income to contribute to an IRA. The working spouse's income, however, must equal or exceed the total IRA contributions made on behalf of both spouses.

INVESTOPEDIA EXPLAINS 'Spousal IRA'

To qualify to make spousal IRA contributions, the couple also must file a joint tax return. Spousal IRAs can be either traditional or Roth IRAs, and are subject to the same annual contribution limits, income limits and catch-up contribution provisions as traditional and Roth IRAs. While IRAs cannot be held jointly in both spouse's names, spouses can share their account distributions in retirement.

RELATED TERMS
  1. Reconversion

    A method used by individuals to minimize the tax burden of converting ...
  2. Required Minimum Distribution - ...

    The amount that Traditional, SEP and SIMPLE IRA owners and qualified ...
  3. Triggering Event

    1. A tangible or intangible barrier or occurrence that, once ...
  4. Roth IRA

    An individual retirement plan that bears many similarities to ...
  5. Marital Property

    A U.S. state-level legal distinction of a married individual's ...
  6. Community Property

    A U.S. state-level legal distinction of a married individual's ...
Related Articles
  1. My spouse has little/no income. Can ...
    Retirement

    My spouse has little/no income. Can ...

  2. 6 Retirement Savings Tips For 45- To ...
    Savings

    6 Retirement Savings Tips For 45- To ...

  3. Spousal IRAs For The Non-Breadwinner
    Budgeting

    Spousal IRAs For The Non-Breadwinner

  4. The Tax Benefits Of Having A Spouse
    Taxes

    The Tax Benefits Of Having A Spouse

comments powered by Disqus
Hot Definitions
  1. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  2. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  3. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  4. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  5. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  6. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
Trading Center