How Does an IRA Change for Married Couples?

Each spouse can have an IRA, doubling the couple's nest egg.

Each spouse can have an IRA, doubling the couple's nest egg.

When you get married or move in together, you start to share lots of things, including who does laundry, who makes dinner and who pays the bills. However, one thing you can't share: your IRA. As much as you love your spouse, you have to keep separate IRAs, but there are a few changes when you get married.

Separate IRAs

The I in IRA stands for "individual," and even after you get married, the account doesn't change to an MRA. When you get married, however, each spouse can contribute to his or her own IRA up to their annual contribution limit. For example, in 2012, each spouse can contribute $5,000, assuming each spouse can meet the compensation requirements. Only your earned income, including your wages and salaries, counts toward the compensation requirement. If you've got income from dividends, interest or capital gains, you can't use that income to qualify.

Spousal IRAs

There's no such thing as a "spousal IRA," just a provision in the tax code that lets you rely on your spouse's earned income to qualify you to make an IRA contribution. For example, if your spouse works and you stay at home with the kids, you can use some of your spouse's earned income to qualify you to put money in your IRA. However, you can't double count earned income: for example, if your spouse has $5,000 of earned income and makes a $5,000 IRA contribution, and you don't have any of your own earned income, you're out of luck.

Deduction Limits

You probably know that you can't deduct contributions to a traditional IRA if you are covered by your employer's retirement plan and make too much money, but this restriction could also apply if your spouse has a retirement plan at work, even if you don't. For example, in 2012, if you are married and covered by an employer plan, you can't take any deduction if have a modified adjusted gross income in excess of $112,000. However, if you aren't covered, but your spouse is, you can't claim any deduction if your MAGI is over $183,000.

Extra Options for Inherited IRAs

Usually, when you inherit an IRA, you have to either distribute the entire amount within just five years or take required distributions every year. If the unthinkable happens and your spouse dies, leaving her IRA to you, you have an additional option: treat the IRA as your own. If you're in your 20s or 30s and still working, you likely don't need the money from the IRA. Instead, you can roll the money into your own IRA, allowing you to delay any distributions until you turn 70 1/2.


About the Author

Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."

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