14 Apr Investing without telling a spouse

Q. My husband doesn’t think I need an IRA but I do. I don’t work, but I know I can invest in an IRA anyway. Is there a way to do it so he doesn’t know? Like if I get statements online, etc.?
— Married

A. Saving for retirement is very important, but money secrets are a bad idea

You can contribute to an IRA even if you don’t have earned income. This is called a spousal IRA.

In order to open one, you must be married, filing a joint return, and both spouses must have earned at least the total amount contributed to both IRAs, said Sheri Iannetta Cupo, a certified financial planner with SageBroadview Financial Planning in Morristown.

IRA stands for Individual Retirement Arrangement, Cupo said, so yes, you can open an account in your name under your Social Security number and contribute without your spouse knowing — at first.

“But if you file a joint return and you are able to deduct your contribution to a traditional IRA then your spouse will learn about your IRA when she/he signs the return,” Cupo said. “And even if you make a nondeductible contribution to a traditional IRA, RMDs have to be taken from these IRA accounts at age 70 1/2, therefore, distributions would eventually show on your joint tax return as taxable income.”

So you can make the contribution without your husband’s knowledge, but should you?

You should talk to your husband first.

Cupo strongly encourages you to discuss with your spouse how important it is to you to have retirement savings of your own. She said women on average live longer than men, so it is vitally important that women adequately save for their later years.

“And stress that this also benefits you as a couple as it allows you both to set aside even more monies for your eventual retirements on a tax-favored basis,” Cupo said. “And with the power of compound interest, the earlier you get going, so much the better.”

This can also be an opportunity for you to get more involved with the family finances — as a team.

Often in a family, there is one person that handles the finances, and in this case it sounds like your husband, said Jerry Lynch, a certified financial planner with JFL Total Wealth Management in Boonton.

“Everyone needs to have some understanding of their financial situation, especially women,” he said. “Most men marry younger women and women outlive men, so more likely than not, you will be single again.”

He said the average life expectancy for women is 86, and you don’t want to be in your 80s looking for a job because you did not set enough away.

And, Lynch said, if you set up the IRA without your husband knowing, you could be in for a big fight.

Instead, he suggests you look for a certified financial planner that you and your husband can meet with together.

“You will get a better idea of how everything works and if you need a IRA, it is now coming from an outside party, not from you,” Lynch said.

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This post was first published in April 2016.