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Beth A. Botti, CFP®, ChFC, CLU, CDFA™
Financial Consultant
California Insurance License #0G24537
612 Wheelers Farms Road, Milford, CT 06460
Phone: 203-877-6556 Ext. 169
Fax: 203-301-0736
Email: beth.botti@equitable.com
May/June 2019
Benefits for Stay at Home Spouses
To build retirement savings and Social Security benefits, you generally need the types of earned income from which payroll taxes and retirement plan contributions come. But even if you never earned income, you may still qualify for certain spousal benefits.
Spousal IRA
While most tax-qualified retirement plans require owners to offset their contributions with earned income, a spousal IRA allows contributions in the names of spouses with little to no earned income. This is especially important for parents who interrupt their careers to start and care for families at the expense of income parity when they return to work.Because women may earn less, on average, than men for doing the same work, women are often lagging in retirement readiness. A spousal IRA can help a lower-paid or even non-working spouse save for retirement, as long as the working spouse has enough income to offset contributions from both spouses.
The Rules
If you qualify by the same income limits and age restrictions that govern all IRA accounts and you file a joint federal income tax return, a spouse without any earned income can still contribute to either a traditional or Roth IRA. In 2019, the annual contribution limit is $6,000, plus an extra $1,000 if at least age 50.Income limits, age restrictions and access to an employer-provided qualified retirement plan will determine the tax-deductibility of a spousal IRA. However, owners of any IRA get to enjoy tax-deferred growth potential. Owners of traditional IRAs typically pay ordinary income tax on retirement withdrawals, while qualified distributions from Roth IRAs are tax-free.
In Retirement
Spouses with little to no lifetime income can also qualify for spousal Social Security benefits. Spousal benefits generally are half of the spouse’s benefit at full retirement age, which is 66 this year and increasing to 67 over the next few years.If your spouse begins receiving benefits before or after this age, your spouse’s — and your — monthly benefit will vary depending on when benefits begin. If you take benefits before your spouse’s full retirement age, Social Security reduces the benefit permanently. If you take benefits after this age, benefits permanently increase.
GE-2314425a (11/18)(Exp. 11/20)
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Duly registered and licensed financial professionals offer securities through Equitable Advisors, LLC (NY, NY 212-314-4600), member FINRA,SIPC (Equitable Financial Advisors in MI & TN), offer investment advisory products and services through Equitable Advisors, LLC, an SEC-registered investment advisor, and offer annuity and insurance products through Equitable Network, LLC (Equitable Network Insurance Agency of Utah, LLC in UT; Equitable Network of Puerto Rico, Inc.). Equal Opportunity Employer - M/F/D/V. Equitable Advisors and its associates and affiliates do not provide tax, accounting, or legal advice or services. Representatives may transact business, which includes offering products and services and/or responding to inquiries, only in state(s) in which they are properly registered and/or licensed. Your connection to this website does not necessarily indicate that the sender is able to transact business in your state. The information in this website is not investment or securities advice and does not constitute an offer. For more information about Equitable Advisors, LLC you may visit https://equitable.com/crs to review the firm's Relationship Summary for Retail Investors and General Conflicts of Interest Disclosure.
GE-6572038.1 (4/24)(Exp. 4/26)
CFP®, and CERTIFIED FINANCIAL PLANNER™ are certification marks owned by the Certified Financial Planner Board of Standards, Inc. These marks are awarded to individuals who successfully complete the CFP Board's initial and ongoing certification requirements.
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