Marriage and Your Retirement Account | Ed Slott and Company, LLC

Marriage and Your Retirement Account

By Beverly DeVeny, Chief IRA Analyst
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Marriage changes a lot of things. Some things are not quite as obvious as others.

You can no longer file your taxes as single. You have to choose either married filing jointly or married filing separately. That has an immediate impact on your IRA or Roth IRA contributions. The contribution limits are now based on your joint income.

You may no longer qualify to make Roth IRA contributions. That also means that any contributions you might have already made for the year now become excess contributions.


2016 Roth IRA Contribution Limits

Married/Joint: $184,000 - $194,000            
Single: $117,000 - $132,000

If filing married-separate, the phase-out range is $0- $10,000


On the IRA side, you may no longer be able to deduct your IRA contributions. Here are the deductibility phase-out limits for active participants in company plans for 2016.
 

2016 Deductibility Phase-Out Limits in Company Plans

Married/Joint: $98,000 - $118,000              
Single:  $61,000 - $71,000

If you are not covered by a company plan, but the spouse is, the phase-out range for 2016 is $184,000-$194,000. If filing married-separate, the phase-out range is $0- $10,000.


The other major item that might change is your beneficiary forms. If you want your new spouse to be your IRA beneficiary, then the IRA beneficiary forms should be changed and sent to the IRA custodians to reflect that.

Employer plans are different. For most employer plans, the new spouse automatically becomes your beneficiary. If this is not what you want, then a spousal waiver must be completed and sent to the plan along with your instructions as to who the beneficiary should be. The spousal waiver form can be obtained from the plan. 

While you are checking your retirement account beneficiary forms, don’t forget about insurance policies and any annuities you might have. They also have beneficiary forms that may need to be updated.

The wedding may be over, but the work is just starting.

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