Many couples like to keep all financial accounts as joint accounts, then either spouse can access an account if necessary. An Individual Retirement Account (IRA) can only be owned by a single person, but IRA rules do include provisions that are of benefit to a married couple.
IRS Publication 590
The 107 pages of IRS Publication 590, "Individual Retirement Arrangements (IRAs)" cover everything about these retirement accounts. Under "Who Can Open an IRA," it makes it very clear that a husband and wife cannot participate together in an IRA. As long as there is earned income on the joint tax return, both the husband and wife can have their own IRAs.
The tax rules do allow for both parties in a marriage to have an IRA even if only one works. The spousal IRA rule allows a couple to make contributions into an IRA for both husband and wife, if both or just one is working. An important factor is that IRA contributions must be backed by at least the same amount of earned income. Earned income in this case means salary from a job or earnings from self-employment.
A married couple can have both of their names on an IRA by naming each other as the sole beneficiary of their IRAs. Retirement accounts allow the naming of a beneficiary or beneficiaries. With the spouse as beneficiary, an IRA account passes directly to the spouse if the owner dies, and she can treat the inherited IRA as her own.
Double Your Contributions
The rules preventing a joint IRA and requiring individual accounts can be viewed as a benefit. With two IRAs in the family, a couple can contribute twice as much money each year to the IRAs. In 2013, the maximum contribution into an IRA is $5,500 or $6,500 if the owner is over age 50. With two accounts, a married couple can contribute between $11,000 and $13,000 into their retirement accounts compared with half that if joint accounts were allowed.
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