Ask Terry Questions Splitting An IRA Account

Splitting An IRA Account

By Terry Savage on May 18, 2019 | Investments

Dear Ms Savage,
I have a Rollover IRA brokerage account, from which I take the required minimum distribution. I am 72 years of age and retired.
Can I create a similar account, solely in my wife’s name, then transfer half of what I have in my account to hers? That would be her only IRA, she is 71 years of age and retired.
What type of taxes and/or fees might I expect to encounter if it were possible to do such a transaction?

Terry Says

No, sorry, that won’t work.  Each person can contribute to an IRA based on earned income.  If your wife worked, she should have established her own IRA long ago.  Now the only way she can get your IRA without tax consequences is to inherit it!  (Note to younger readers:  they’re called individual retirement accounts for a reason!)   As for your wife, remember that you can always withdraw more than the required minimum each year, paying ordinary income taxes.  But the best idea is to leave the money in the account growing tax-deferred.


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