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Subject:  Re: 401k spouse question Date:  8/28/2000  2:31 PM
Author:  TMFPixy Number:  24412 of 88508

Greetings, Tresarivers, and welcome. You asked:

<<Does the 401k have the ability to add additional funds for the purpose of saving for retirement for a non-working spouse, like the IRA does?

If not, any suggestions? We are newly in the position of needing to tax-shelter our income, as my husbands salary has increased quite a bit recently.>>

No, there is no spousal contribution for a 401k plan. That exists only for an IRA when one spouse doesn't work. Your only other option for doing something on a tax deferred basis beyond the IRA is to use an annuity, which is NOT a good idea for most folks. To see why, see the annuity series at

FWIW, there really is nothing wrong with paying taxes when you must. Indeed, often using a fully taxable account in a long-term, buy and hold strategy, will result in a greater after-tax stash than an IRA or 401k. So if you've used up your IRA for the unemployed spouse, then use a taxable account. It's perfectly permissible and often Foolish to do so.

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