The spousal IRA: Helping your spouse save for retirement

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How your spouse can boost your retirement savings.

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It happens: At a certain point—maybe after the birth of a child, a layoff, or an illness—one spouse might have to stop working for a time. The good news is that a hiatus from the workforce doesn’t have to derail that spouse’s retirement savings.

An unmarried person who doesn’t work cannot contribute to an IRA. But thanks to the Kay Bailey Hutchison Spousal IRA Limit, as long as you file a joint tax return, even if one of you has no income, you can consider the household compensation when calculating your IRA contribution amount.

A spousal individual retirement account or arrangement (IRA) is just a regular IRA—the distinction being that its limits and deductibility looks at the household income, rather than the income of the nonworking spouse.

Let’s say you’re the nonworking spouse. You can open and fund a traditional or Roth IRA, as long as you meet these criteria:

If your income has just gone from two to one, setting aside extra money in an IRA may not seem feasible. But given that a period of unemployment can take a big bite out of your future savings, every little bit helps—and having the extra tax deduction (if you set up a tax-deferred spousal account) might also be useful.

The rules for annual contribution limits, and the amounts you can deduct each year, are basically the same for spousal IRAs as for ordinary IRAs.

Contribution limits. For 2024 and 2025, you can each save up to $7,000 a year, or $8,500 if you’re 50 or older. The contribution limits apply separately to each spouse, because IRAs are individual accounts.

So in theory a married couple, filing jointly, could contribute $7,000 each annually to an IRAs (or $8,500 if they’re 50 or older). That’s $13,000 a year, or $15,000 including the catch-up provision.

Deductions. If the working spouse is not covered by a workplace retirement plan, contributions on behalf of a nonworking spouse to a traditional IRA can be fully deducted from the household income, no matter what the household income.

If the working spouse is covered by a workplace retirement plan, contributions are fully deductible if the household income is below $230,000. Partial deductions are allowed from $230,000 and $240,000 in household income (for the 2024 and 2025 tax years).

You don’t have to contribute to a regular, tax-deferred IRA. If one spouse already has a tax-deferred plan, setting up a spousal Roth IRA might be the way to go. You won’t be able to deduct contributions to the spousal Roth IRA, but withdrawals in retirement will be tax free (assuming you’re at least 59½ and have had the Roth account for at least five years).

Roth IRAs do come with income limits, though. For 2024 and 2025, couples who are married and filing jointly can contribute up to the full amount ($7,000 or $8,500 for those 50 and up) as long as your modified adjusted gross income (MAGI) is below $230,000. If your MAGI is $230,000 to $240,000, you can contribute a reduced amount. If you earn more than $240,000, you can’t contribute to a Roth IRA (for yourself or for your spouse).

When one spouse takes time out of the workforce, it can disrupt retirement savings. A spousal IRA offers a way to keep building your nest egg, even without access to a workplace plan. Although an IRA has lower contribution limits than a 401(k), it can help close the savings gap and provide more security for your future.