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If you are a spouse that stays at home, it seems unfair that you can’t build up a retirement account in your name. After all, one of the requirements of opening an Individual Retirement Account (IRA) is that you need earned income. The truth is that the IRS makes an exception for married couples that want to boost their household retirement savings while providing a stay at home spouse the ability to build a nest egg. This arrangement is often referred to as a spousal IRA. There are eligibility requirements for these spousal IRAs.

Are You Eligible for a Spousal IRA? Many households have an arrangement in which one spouse stays at home to care for the home and children. In such cases, if you are the stay at home parent, you can open an IRA in your name. In fact, the spousal IRA is just a regular IRA. The name merely refers to the fact that the working spouse can make a contribution to an IRA held in the name of a non-working spouse.

The eligibility requirements for the spousal IRA are straightforward:

Marital Status: Married
Tax Filing Status: Married, filing jointly
Earnings: Contributing spouse must have compensation/earned income that amounts to at least the amount annually contributed to the non-working spouse’s IRA. If the contributing spouse also has an IRA, annual compensation/earned income must exceed the combined contributions the IRAs.
Age: The non-working spouse must be under 70 1/2 in the year of the contribution for a traditional IRA. There are no age restrictions on a Roth IRA for a non-working spouse.

Once you determine that you meet the eligibility requirements, it’s possible for you to open an IRA in your name and have your working spouse contribute to it. Understand that IRAs must be held separately, not jointly. This means that the non-working spouse owns the assets in the IRA. Once your working spouse contributes to the IRA, the money becomes yours. The IRA is in your name and opened with your social security number, and it remains yours even if you divorce.