Benefits Of Participating In A Spousal IRA

American Investment Planners LLC

500 North Broadway, Suite 260, Jericho, NY 11753

(516) 932-5130 / (866) 932-5130

As a spouse who is not currently working or who is working but has little income, the opportunity to contribute to a 401(k) is likely not available. However, not contributing to a retirement savings plan could hinder you and your spouse's ability to live comfortably down the line. But just because you are not contributing at the moment doesn't mean your family has to suffer - spouses who are not working can take advantage of a Spousal IRA!

So what is a Spousal IRA? Spousal IRAs are retirement accounts that allow the working spouse to make a contribution on behalf of the non working spouse. Essentially, it is an IRA set up in the non working spouse's name, which receives its contributions from the working spouse. By creating one of these accounts, the non working spouse can start to grow a retirement fund of their own through the help of their partner while they are out of work.

The Benefits

The ultimate benefit of a Spousal IRA is that it offers your family another opportunity to save. Since the working spouse will be limited in the amount of money they can contribute to their own account, any extra that they planned to save can be placed into the non working spouse's account, which would otherwise have not existed. Furthermore, these IRA accounts also benefit the non working spouse on their own due to the fact that they now have assets in their name; although it is the working spouse who is contributing, the deposits made fall under the name of the non working spouse since it is technically their account.

Things To Keep In Mind

While the working spouse can contribute at any age, the non working spouse on the account must be under the age of 70 1/2 during the year when the contribution is made.

For more information about Spousal IRAs and how you and your family can benefit by participating in one, please contact the American Investment Planners LLC team at (516) 932-5130 today.