Other retirement
planning solutions
When one spouse in a traditional marriage earns income and the
other doesn’t, the income-earner can usually set up a spousal IRA for
the non-earning spouse. Unmarried couples don’t have this option, even
if one supports the other. So if either you or your partner is the sole
income provider for your family, you’ll need to find other ways to
create a retirement plan for the non-earning partner.
One alternative for the dependent partner is to earn enough doing freelance or part-time work to contribute the maximum to an
IRA.
In 2006, you can put away $4,000, or up to 100% of your compensation if
you earn less than $4,000. If you’re 50 or older and earn an additional
$1,000, you can put in that as a catch-up contribution. The same limits
apply for 2007.
Another possible approach is for one partner to employ the other and
set up a retirement plan designed for small businesses or sole
proprietors, such as a
SIMPLE plan,
solo 401(k),
or a
SEP IRA.
Although the employer will have to follow all the rules and
requirements governing these plans, it’s worth looking into, especially
if the income-earning partner already owns a business.
In addition, you can always invest in ordinary taxable accounts that
you designate for retirement. And you might want to look into using
deferred annuities
to accumulate retirement savings for the non-earning partner.
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