If you earn more than $194,000, they are not deductible at all.

(And tax deductibility for contributions to your own IRA will be phased out between $98,000 and $118,000 of income). A Schwab Financial Consultant can help you achieve your goals. Funds, Real Estate Investment Trusts Thumbs up / down votes are submitted voluntarily by readers and are not meant to suggest the future performance or suitability of any account type, product or service for any particular reader and may not be representative of the experience of other readers. As you can see, there are several things you and your husband can do to increase your retirement security, and I highly recommend that you look into them all.

If you participate in a 401(k) or pension plan at work, and earn more than $184,000, your contributions to a spousal IRA are not fully deductible.

So if your FRA benefit is $2,000 per month, your husband would be able to collect up to an additional $1,000. Older Investors Are Asking: Should I Get Out of Stocks? This is how long you need to live to give you greater lifetime benefits despite postponing your start date. Get Automated Investing with Professional

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See Schwab's comprehensive list of services and fees. Canadian Stocks, Schwab Retirement Income Variable Member SIPC. The short answer to your next question is that yes, a nonworking spouse who has reached age 62 can collect Social Security benefits based on the working spouse’s earnings record once the working spouse has filed for benefits or once the working spouse has reached their full retirement age (FRA).

Download the Schwab app from iTunes®Close. The FRA is age 66 for those born between the years 1943-1954. Explore other Ask Carrie articles on personal finance. and what you could pay at Schwab. Understand common costs of investing, Yes, There are Retirement Benefits for a Nonworking Spouse, Get more money tips for the whole family at, Know When to Roll ‘Em: How to Roll Options Positions, Charles Schwab Investment Management (CSIM), Withdrawals & Learn more about our services for non-U.S. residents. Talk with your Schwab Financial Consultant or call 800-355-2162. If you apply now, at age 62, your benefit will be permanently reduced by 25 percent. Unlike the worker’s benefit, which continues to increase until age 70, a spouse’s benefits max out at FRA. For Schwab account questions and general inquiries, contact Schwab. These are all great questions, so thanks for asking. The Charles Schwab Corporation provides a full range of brokerage, banking and financial advisory services through its operating subsidiaries. Access to Electronic Services may be limited or unavailable during periods of peak demand, market volatility, systems upgrade, maintenance, or for other reasons. Carrie cannot respond to questions directly, but your topic may be considered for a future article. Therefore, even though it might be tempting to begin taking benefits as soon as possible—after all you'll then collect checks for a longer period of time—it's a good idea to look at your "break even age" before making a final decision. Spousal benefits from Social Security. (FRA is 66 for those born between 1943 and 1954.) insights. If you or your spouse files for Social Security benefits early, your benefits will be permanently reduced.

Both you and your husband should give a lot of thought to when to begin collecting Social Security. The spousal benefit is ½ of the worker’s primary insurance amount (PIA). When a worker files for benefits from Social Security, the worker's spouse may be able to claim a benefit … I do want to mention one caveat, however, especially appropriate for someone approaching retirement. Meet the experts behind Schwab's investing or trade on your own. When displayed, thumbs up / down vote counts represent whether people found the content helpful or not helpful and are not intended as a testimonial. Its broker-dealer subsidiary, Charles Schwab & Co., Inc. (member SIPC), offers investment services and products, including Schwab brokerage accounts. Wait until FRA in order to receive his full spousal benefit, which is 50 percent of your FRA benefit. Distributions, Required Minimum The information provided here is for general informational purposes only and is not intended to be a substitute for specific individualized tax, legal or investment planning advice.

Where specific advice is necessary or appropriate, consult with a qualified tax advisor, CPA, financial planner or investment manager. commissions, fees, and other costs. He was a stay-at-home dad (no paycheck and no retirement account) and I plan to continue working for at least another five years. Also, can he receive Social Security benefits on my work record? Do I have to retire for him to be eligible? Non-U.S. residents are subject to country-specific restrictions. My husband and I are both 62 and trying to prepare for retirement. Our Insights & Ideas bring you information that fosters that ownership, because we believe that the best outcomes in life come from being fully engaged. Can I now open an IRA for him? The Social Security benefit of a nonworking spouse is up to 50 percent of the working spouse’s FRA benefit. Distributions, Rollover IRA/401K Rollover Get more money tips for the whole family at Schwab MoneyWise. Chances are, the longer you can each wait (up to FRA for him, 70 for you), the better.

Automated investing, professional advice, Once you file (or reach your FRA), your husband can: Just for the record, there is an exception to the age requirement if your spouse is caring for your child who is under age 16. Therefore, depending on your personal tax rate and the length of time you plan to hold your investments, it might make more sense for you to invest in a taxable account rather than an IRA.

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Also note that there is no benefit for your husband to postpone filing beyond age 66. That could make a big dent in your monthly income and would also reduce any future survivor benefits should your husband outlive you. A nonworking spouse is entitled to a Social Security benefit of up to 50 percent of the earner’s benefit. Tax-deductibility is another issue. Options, No Load, No Transaction Fee Mutual

Withdrawals from a traditional IRA are taxed at your ordinary income tax rate. Take Social Security right away. Alternatively, if you qualify (earning less than $194,000), you might want to consider a Roth IRA. At Charles Schwab, we encourage everyone to take ownership of their financial life by asking questions and demanding transparency. Annuity™. This site is designed for U.S. residents.

Any written feedback or comments collected on this page will not be published. This sounds clear enough, but there are a number of rules and exceptions to think about. Bottom line, if you wait until you reach your FRA to file, you will be capturing the maximum spousal benefit. On the other hand, withdrawals from taxable accounts are taxed as capital gains (with a preferential rate for investments held for more than one year).

In any case, I encourage you to save to the max! Understanding these principles can help (FRA is 66 for those born between 1943 and 1954.) Email us at askcarrie@schwab.com. Read important information about our Annuity®, Schwab OneSource Choice Variable

A little planning can go a long way. or trade on your own.

you reach your financial goals. Automated investing, professional advice However, filing before his FRA will permanently reduce his spousal benefit. So if your FRA benefit is $2,000 per month, your husband would be able to collect up to an additional $1,000. If you're married filing your tax return jointly, you can contribute funds into two separate IRAs—one for him and one for you—as long as you have earned income equal to both contributions. Let’s go in order: One of the best deals around for a nonworking spouse is a spousal IRA. In this case, you would have to have earned income of $13,000 or more to cover both contributions. Baby On the Way: Are You Ready for Your New Financial Reality? Unauthorized access is prohibited. Does It Make Sense to Buy Your First Home While You're in the Military? Spousal benefits do not earn delayed credits, so the spouse will get the greatest benefit by starting Social Security payments at full retirement age (FRA). Want to know more? And if you can hold off even longer—until age 70—you will receive the highest possible retirement benefit for yourself and the highest possible survivor benefit for your husband. The Social Security benefit of a nonworking spouse is up to 50 percent of the working spouse’s FRA benefit.