Can a Married Couple Have a Joint IRA?
The individual retirement account is a type of account that makes it possible for individuals to save for retirement on a tax-advantaged basis. If you are married, you may wish to open a single IRA to which both you and your spouse can contribute. However, in this situation, the rules of the IRA prevent you from doing so.
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Joint IRA
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As the name implies, the individual retirement account is only for individuals. This means that you do not have the option to open one jointly with your spouse. If you and your spouse want to contribute to a retirement account, you will have to open two separate individual retirement accounts. The IRA is not like a bank account, in which multiple owners can hold possession of the assets inside.
Beneficiary
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Although you do not have the option of opening a joint IRA with your spouse, it does not mean that the assets cannot be left to your spouse when you die. When you open an IRA, your broker will give you the opportunity to name a beneficiary for your account. In this situation, naming your spouse ensures that the assets in the account will pass to your spouse when you die. The spouse then has the option to roll the funds over into her own IRA at that time.
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Spousal IRA
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One option to consider in this situation is the use of a spousal IRA. Technically, a spousal IRA is still a traditional IRA and is not a special type of account. The only difference is that it allows one spouse to fund the other spouse's account. For example, if the husband works and earns all of the income for the family, he can use part of his money to fund his wife's individual retirement account. He simply has to make enough money to pay for the contributions to both IRAs.
Considerations
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If you are interested in opening a separate IRA for your spouse, look at how much you contribute to your own account first. Unless you reach the annual contribution limit for your own IRA, it may not make sense to open another account. For example, as of the time of publication, the annual contribution limit for the IRA is $5,000. If you only contribute $2,000 annually to your account, it may not make sense to open a separate account for your spouse. First, max out your account and then worry about dealing with another account.
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