Spousal IRAs

What are Spousal IRAs & Who Can Contribute to One?

Spousal IRASpousal IRAs are designed to allow a working spouse to make IRA contributions for a spouse who does not have enough earned income to make their own IRA contributions.

There are some key requirements that must be met:

  • The spouses must be legally married and file a joint federal tax return. This includes same-sex couples.
  • The spouse receiving the contribution must have less compensation, or no compensation, than the spouse making the contribution.
  • The IRA account must be held in the name of the spouse for whom the contribution is made. If Gina is the working spouse and the contribution is made for George, then the IRA account must be in George’s name. George has complete control over the IRA account. He can name his own beneficiaries, invest the funds as he wishes, and take withdrawals whenever he wants.

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Avoiding Spousal Beneficiary Mistakes in 5 Easy Steps

Who is a spouse beneficiary? Spousal Beneficiary

A spouse beneficiary must be married to the account owner at the time of the account owner’s death, and he or she must be named on the beneficiary form (or inherit directly through the document default provisions).  A spousal beneficiary has a number of unique options

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Inherited IRAs: Tips You Need to Know

Inherited IRAsRetirement planning is complicated. It’s a personal and situational endeavor with plenty of possible pitfalls in the way of success. Inherited IRA rules vary depending on the beneficiary type: Non-Spouse Beneficiaries, Spouse, and a Trust Beneficiary.

As a beneficiary of an IRA, you may find yourself with many questions and concerns. The rules are different for a non-spouse beneficiary than they are for a spouse or trust beneficiary. Arm yourself with working knowledge of some of the Do’s and Don’ts, and work with a competent, educated financial advisor to keep more of your assets and lose less to taxes and unnecessary fees.

Non-Spouse Beneficiaries

Only move the inherited funds as a direct transfer. Inherited IRA funds must be moved via a trustee-to-trustee transfer; NOT a 60-day rollover. In a direct transfer, the beneficiary does not have use or control of the IRA funds during the transfer.

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