By Tom Rowley
According to American Express, 6 million people became engaged on Valentine’s Day 2014.[1. American Express, “Valentine’s Day 2014: More Americans Say They’ll Spend for Love,” Feb. 3, 2014.] And, while a new study suggests that discussing romantic comedies may help newlyweds stay married,[2. Daily Mail, “Romcoms ‘Save Marriages’: Study Finds Watching a Film About Relationships and Discussing it Can Help Cut Divorce Rates,” Feb. 3, 2014.] the fact is that many of these marriages will end in divorce. So, to mark this momentous day, I bring you the first of a three-part series highlighting what retirement savers need to know when starting a marriage … or ending one.
IRAs and Community Property States
The state you live in has a tremendous effect on your flexibility in naming beneficiaries to your IRA. If you don’t live in a community property state, you are free to name whomever you wish as your IRA beneficiary, even if you’re married.
If, however, you live in a community property state, your spouse (or registered domestic partner or civil union partner) owns half of any contributions you made while you were married plus earnings on those contributions. That money is considered “community property.”
Learn which states are “community-property” states and how that may affect your retirement account.
Tom Rowley is Invesco’s Director of Retirement Business Strategy.
The information provided is for educational purposes only and does not constitute a recommendation of the suitability of any investment strategy for a particular investor. Invesco does not provide tax advice. The tax information contained herein is general and is not exhaustive by nature. Federal and state tax laws are complex and constantly changing. Investors should always consult their own legal or tax professional for information concerning their individual situation. The opinions expressed are those of the authors, are based on current market conditions and are subject to change without notice. These opinions may differ from those of other Invesco investment professionals.
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All data provided by Invesco unless otherwise noted.
Invesco Distributors, Inc.
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