Author Topic: Question about Spousal IRA  (Read 213 times)

Trifele

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Question about Spousal IRA
« on: November 08, 2018, 04:20:48 AM »
I'm hoping one or more of you smart mustachian investment and tax gurus can answer this question.

Us:  Married filing jointly.  I work FT, spouse is at home with the kids.  At work I have access to 401k.

Question:  I plan to FIRE from FT job soon, probably in early January.  After FIREing I will still have some income from a side gig, but will no longer have access to an employer-sponsored retirement plan.  I think I can contribute to an IRA based on my side-gig income in 2019, but are there any options remaining in that scenario for a spousal IRA contribution?  Or are we stuck, unless spouse has some earned income?

Does the fact that I'll be working a very brief time at the full time job in CY 2019 (with access to the employer-sponsored plan) help at all?  Does that open the door to a full 2019 spousal IRA contribution? 

Thanks in advance!

terran

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Re: Question about Spousal IRA
« Reply #1 on: November 08, 2018, 05:34:03 AM »
As long as you or your spouse has sufficient earned income (including that from a business) to cover the contributions then you can both contribute to an IRA.

If you or your employer contributed to a workplace retirement plan at any point in the year for which you'd like to make IRA contributions then you're considered to have been covered by a workplace retirement plan for that year, so pay attention to the relevant income limits when considering how much and what kind of an IRA contribution you can make.

Remember that you'll need to subtract 1/2 of self employment tax to arrive at your earned income from self employment, so be careful with that if you're close to contributing all of your earned income for the year.

You could also consider opening a solo 401(k) for your side gig.

Trifele

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Re: Question about Spousal IRA
« Reply #2 on: November 08, 2018, 08:02:54 AM »
Thanks!