Nowadays almost in all f the households both spouses are in paid employment. But there are some families where (mostly) it is the wife who runs the household and takes care for children and the husband is the only breadwinner. There is a problem that a housewife is not paid for doing the housework and additionally, she has no rights for getting her retirement. If the husband dies, she is left without any sources to survive.
Additionally, such a person is fully dependent on the earning spouse. It is also possible that one of the spouses earns a fortune, and the second one receives only a survival salary, so establishing a separate account simply does not pay for both. First person cannot contribute more money, however, he or she could, and the second one cannot afford to fill the limit.
Why is the spousal Roth IRA advisable?
It does no matter which of you have qualifying income If you are willing to have a separate account, each of the spouses will have to gain as much money as required - if you decided to share the account, only one of you has to reach the minimal limit. The second spouse does not have to earn at all. It is a very beneficial solution for those pairs who decided that one of them will stay at home and take care for household or for children (If you have any). Sometimes it happens that one of you is ill or unemployed, and does not have any chance to bring money home.
Both of you have the same rights to contribute and withdraw your money OK, you have to trust your partner before sharing the retirement account. But if you are married you probably share your saving account and of course - your lifetime. None of the spouses will be dependent on the second one, it does not matter that one of you have been unemployed - all the money put into the account are a property of both of you. The reason for contributing all the money by only one person may be caused by disability or even lack of time. So the managers decided that the common account will be fully shared, in all of the aspects. Of course, it is advisable that it is the spouse with the qualifying income should make the contributions, but you can contribute from any sources you wish.
Together you can contribute twice as much as the limit by the traditional Roth IRA sets Of course, it does not mean that each of you can contribute twice as much as he or she could by the traditional Roth IRA, but that the amount of money that can be contributed is doubled. The presented table shows, how the amount changes, even if one of you does not earn his or her own incomes.
Of course, when only one of you is more than 50 years old, the total amount you can contribute will be only $11000 , not $12000
What requirements should be filled?
First of all - you have to be married It is quite obvious that to establish a spousal account you have to have either a husband or a wife. You cannot share the account with your partner or fiance. It may seem a bit harmful for the pairs who are not willing to get married, but the institution of matrimony is more safe and reliable for the managers. It is suspected that it is easier to split up than to get divorced.
At least one of you has to earn the qualifying income At least one of you has to earn as much as required; it does not matter who. It is about the stability of your account. Incomes are also regular gifts from your relatives if both of you cannot afford it.
Should I decide for the spousal Roth IRA?
If you are a good couple that finds an agreement easily you can decide to share your retirement account. But only one issue seems to be a bit misleading; however, in the light of law, the account belongs to both of you, the money will sometimes still be earned by only one person who may perceive sharing his savings as harmful.