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Retirement Savings for Spouses

Q: I am a stay-at-home parent. Is there any way I can save for retirement?

A: Yes, fortunately you can! As long as your spouse has earned income, the IRS allow you to contribute to a Spousal IRA. The amount you can contribute is set by the IRS and changes from year to year. For 2010, the maximum amount is $5000, with an additional $1000 allowed if you are age 50 or older. If your spouse earned less than $5000 (or $6000 if you are 50 or older), your contribution is limited to the amount of earned income. It is important to remember that the contributions to a traditional IRA are only tax deductible if your adjusted gross income is below IRS limits. Also, for 2010, the income limits for Roth contributions have been removed; normally a person can’t contribute to a Roth if thier adjusted gross income is above a certain level. Although contributions to a Roth IRA are not deductible on your income tax return, the earnings are tax free when you withdraw them for retirement or allowed expenses.

If you like, you can split your contributions between a traditional and Roth IRA, but you cannot exceed the $5000 limit between the two. As with all investments, it’s important to consult your investment advisor and accountant for the suitability of an investment for your circumstances.

Don’t know where to begin?  If you are looking for a financial advisor, click here .

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