Secure Your Future Together: Spousal IRA Contributions Made Simple

For couples where one spouse might not work, a Spousal IRA can be a key to unlocking retirement savings opportunities. Find answers to common queries below and for detailed guidance, book a free consultation with a Facet expert. Our aim is to help you and your spouse navigate smoothly towards a secure retirement.

Understanding Spousal IRAs

A Spousal Individual Retirement Account (IRA) allows a working partner to contribute to an IRA in the name of their working spouse, giving both the chance to save for retirement. This is especially important, in households where one partner may not have their income.¹

Spousal IRAs were established to ensure that non-working spouses, who traditionally may not have saved for retirement, can also plan for their future. They have been a part of retirement savings strategies for years, highlighting the significance of providing opportunities for both partners, in planning for retirement.²

Who Qualifies?

Married couples with at least one working spouse.²
Couples filing a joint tax return.²

The Benefits:

Dual Retirement Savings: Both spouses can accumulate retirement savings, doubling your retirement nest egg.²
No Required Minimum Distributions (RMDs): Roth IRAs do not require withdrawals at a certain age, giving you more control over your wealth.
Tax Planning Flexibility: Converting to a Roth IRA can provide more flexibility in managing your tax liabilities in retirement.²

Tax Implications:

Depending on the type of IRA (Traditional or Roth), contributions can be tax-deductible, and withdrawals in retirement may be tax-free.³

Steps to Opening a Spousal IRA:

Choose the Right IRA: Decide between a Traditional or Roth IRA based on your financial situation and retirement goals.⁴
Select a Provider: Look for institutions offering IRAs, such as Facet, which provides personalized wealth management services.⁴
Complete the Application: Fill out the necessary paperwork, ensuring you designate the account as a spousal IRA.⁴
Make Contributions: Contribute up to the annual limit, considering the earning spouse’s income.⁴

Contribution Limits:

For 2023, the total contribution limit for both IRAs (working and non-working spouse) is $6,000 each ($7,000 if age 50 or over), subject to income limitations and eligibility.⁵

Rules & Regulations:

The working spouse must have enough earned income to cover the contributions to both IRAs.¹
Contributions to a Spousal IRA can be made until the tax filing deadline of the following year.¹

Let Facet Guide You

Starting a Spousal IRA is a significant step towards a secure retirement for both you and your spouse. However, navigating the intricacies of retirement planning and ensuring that you’re making the most out of your contributions can be complex. That’s where Facet comes in.

At Facet, we offer personalized, flat-fee financial guidance and services tailored to your unique financial situation and goals. Our team of experts is ready to help you set up your Spousal IRA, make informed investment choices, and plan for a future where both you and your spouse can enjoy the retirement you’ve dreamed of.

Ready to Start?

Contact us today to learn how we can help you get started with your Spousal IRA and ensure you’re on the right path to a secure and fulfilling retirement.

What you need to know: a Spousal IRA can be a key to unlocking retirement savings opportunities. Book a free call with a Facet expert to learn more.

Sources:

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** Nerdwallet review conducted in October of 2023 based on the time frame of August – October 2023. Nerdwallet’s independent assessment includes data collection, interviews and testing which results in star ratings from poor (one star) to excellent (five stars). Nerdwallet was not paid for this review however does receive compensation based on referrals.

How we’re different.

At Facet, we never earn commissions, so our success is only measured in terms of your satisfaction and financial security. We achieve this through personalized financial advocacy that’s changing expectations, industry-wide. Here’s how we set ourselves apart:

What am I actually getting?

What are the minimum assets required?

How is my planner qualified?

How will we meet?

How will technology be used?

How will my fees be calculated?

What am I actually getting?

Personalized, jargon-free advice for everything money impacts in your life + help executing your plan

What are the minimum assets required?

How is my planner qualified?

Always a CFP^® Professional (the highest possible certification)

How will we meet?

Up to 4 virtual meetings (year 1) and varying sessions based on membership tier (years 2+)

How will technology be used?

Easy-to-use platform with key info in one place

How will my fees be calculated?

One fixed fee based on your needs

Traditional financial advisor

What am I actually getting?

Usually a 30-60+ page report that mostly focuses on your investments

What are the minimum assets required?

Typically $100K or more

How is my planner qualified?

Titles are unregulated and misleading - not always a CFP^® Professional

How will we meet?

Typically one or two meetings/year, usually in-person, during business hours

How will technology be used?

Technology is usually not a central part of the service

How will my fees be calculated?

Varies; typically a % of what you invest, plus fees. Cost increases as your money grows

Robo-advisor

What am I actually getting?

A “robot” or algorithm, that manages your investments; sometimes can ask a person one-off questions for an additional fee

What are the minimum assets required?

Varies

How is my planner qualified?

No, or limited access to, a financial planner

How will we meet?

No--or only ad hoc--meetings

How will technology be used?

Technology is typically the only service offered

How will my fees be calculated?

A % of what you invest, plus fees. Cost increases as your money grows

What Facet members are saying.

"Facet has completely changed my outlook on how I handle my finances and my confidence in my financial stability and strength in the future. My planner and the team are incredible, and just as excited as I am about building a strong financial future for me."

"Having a plan that works for US is such a relief, and for such a very decent price. I have already recommended my whole family and my closest friends."

"We were talking last night about how effective our relationship has been with Facet and we are so grateful. Thank you for your patience and diligence in working with us. It's truly been one of our biggest positives of 2020 and we look forward to many years ahead. "

Testimonials were provided by current members of Facet ("Facet Wealth, Inc."). Members have not been paid for their testimonial and there are no material conflicts of interest that would affect the given testimonials. These testimonials may not be representative of the experiences of other members, and do not provide a guarantee of future performance success or similar services.