Question

A married couple wants to fund IRAs to save for their retirement. The husband is 60 years old and is a retired CFO, while the wife is 55 years old and works for the federal government. What is the maximum amount that the couple may contribute?

A) No contributions are permitted once either spouse reaches age 59 1/2
B) $6,000 for the wife, but no contribution is allowed for the husband, since he is retired
C) $12,000
D) $14,000

Answer 1

The maximum IRA contribution for the couple is $13,000, with the wife contributing $6,000, and the husband contributing $7,000 if he has earned income; otherwise, it may be only $6,000 for the wife.

Step-by-step explanation:

The maximum amount that the couple may contribute to their Individual Retirement Accounts (IRAs) depends on the current contribution limits set by tax rules. As of the most recent guidelines, individuals under the age of 50 can contribute a maximum of $6,000 per year. However, since the husband is 60 years old, he qualifies for the catch-up contribution, which adds an additional $1,000, raising his limit to $7,000.

Therefore, the total maximum contribution for the couple would be the sum of the wife's $6,000 (as she is under 50) and the husband's $7,000, totaling $13,000. However, the contribution also depends on earned income, and since the husband is retired, unless he has earned income, he may not be able to contribute.

If he does have earned income, then $13,000 is the correct answer. Otherwise, if only the wife has earned income, they can contribute a maximum of $6,000 unless she contributes to a spousal IRA on behalf of her husband.