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Spousal IRA even if that spouse works?
Old 05-15-2018, 05:56 PM   #1
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Spousal IRA even if that spouse works?

I heard this asked on the radio and the host (normally very knowledgeable) didn't 100% know the answer.

Situation:

Spouse 1 earns 50K
Spouse 2 earns 3K

I know if Spouse 2 earned nothing, then Sp 1 could fully fund a Spousal IRA.

However, since 2 has some earned income, can Sp 1 still do the Spousal IRA or is 2 limited to the 3K that they earn?
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Old 05-15-2018, 06:01 PM   #2
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Both spouses can contribute in any amount up to their combined income and respecting their annual contribution limit.

So in the scenario you describe, spouse 2 can contribute $5500 to their IRA. They are not limited by the $3K they earn.

I think if you look for the Kay Bailey Hutchinson spousal IRA at irs.gov you'll find information there about this topic.
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Old 05-15-2018, 06:11 PM   #3
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The employed spouse is allowed to make an IRA contribution on behalf of a non-working spouse or a spouse who has little income. These contributions are referred to as "spousal IRA contributions."

https://www.investopedia.com/retirem...contributions/

Read more: Making Spousal IRA Contributions https://www.investopedia.com/retirem...#ixzz5FcQF7eKC
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