Thinking a Stay-At-Home Parent Can’t Save For Retirement
Typically, you must have earned income to contribute to a traditional IRA or Roth IRA. So, many single-income families assume the breadwinner is the only spouse who can contribute to one of these retirement accounts because the nonworking spouse doesn’t have any earned income, said Thomas Walsh, an Atlanta-based certified financial planner and portfolio manager with Palisades Hudson Financial Group. However, the IRS makes an exception in this case.
“In order to promote retirement savings from both spouses in the home, the IRS created the spousal IRA,” Walsh said. A working spouse can contribute up to $5,500 a year ($6,500 if 50 or older) for a nonworking spouse. You have until the April tax deadline to make a contribution for the previous year and can deduct the contribution on your federal tax return if you meet certain requirements.