Even if one spouse earns most or all of the household income, both partners can still build retirement savings through a spousal IRA. Many couples overlook this option, yet it can significantly increase how much they save for the future.
A spousal IRA lets a working spouse contribute to an IRA in the name of a non-working or low-income spouse, as long as they file a joint tax return. The contributions can go into either a Traditional or Roth IRA, depending on eligibility and tax preferences.
Read on to learn how spousal IRAs work, who qualifies, and how they can help a couple make the most of their combined retirement strategy without relying on just one income.
How a Spousal IRA Works
A spousal IRA gives couples the opportunity to save for both partners, even if only one earns income. It is not a new type of IRA but a way to fund a Traditional or Roth IRA for a spouse with little or no earnings, as long as both file a joint tax return.
In most cases, IRAs require earned income to make contributions. A spousal IRA makes an exception by letting the working spouse use their taxable compensation to fund two accounts — their own and their spouse’s. The key condition is that the working spouse’s income must be high enough to cover both contributions.
✏️ Hypothetical Example:
If you plan to contribute $7,000 to your own IRA and $7,000 to your spouse’s, your earned income for the year must be at least $14,000.
📝 Note: Earned income refers to wages, salaries, tips, or self-employment income. It does not include investment returns, rental income, or other passive sources.
Are Spousal IRAs Joint Accounts?
A spousal IRA is not a joint account. Each spouse owns a separate IRA in their own name. The non-working spouse controls their account, chooses investments, and benefits from tax advantages individually. They may invest in almost any traditional asset type such as stocks, bonds, mutual funds, or ETFs.
Contribution Limits
A spousal IRA follows the same contribution limits as a Traditional or Roth IRA.
- For 2025, the limit is $7,000 for those under age 50.
- For age 50 and older, the limit increases to $8,000 (including the catch-up contribution).
However, the total combined contribution for both IRAs cannot exceed the working spouse’s earned income or the annual limit, whichever is lower.
📝 Note: Contribution limits are based on IRS rules and can change each year. The ability to contribute the full amount may also depend on your income level and tax filing status.
Eligibility Rules for a Spousal IRA
To qualify, both spouses must meet specific conditions:
✅ The couple must file a joint tax return for the year of contribution.
✅ The working spouse must have earned income equal to or greater than the combined contribution amount.
✅ Both spouses must meet the eligibility rules for the chosen IRA type. For example, Roth IRAs have income phase-outs that may affect contribution amounts.
Spousal IRAs can be a practical way for married couples to grow retirement savings together, even if only one partner is earning income during the year.
Roth IRA income limits & Traditional IRA tax deduction limits
When contributing to a spousal IRA, income limits still apply because it is either a Traditional or Roth IRA. These limits determine how much you can contribute — or whether you qualify for a tax deduction — based on your Modified Adjusted Gross Income (MAGI) and filing status.
A high MAGI can reduce or even eliminate your ability to make a Roth IRA contribution. Traditional IRAs do not have income limits for contributions, but your ability to deduct those contributions may be restricted at higher income levels.
📝 Note: The IRS provides separate income thresholds when only one spouse is covered by a workplace retirement plan such as a 401k. These rules help ensure fair deduction limits between working and non-working spouses.
Roth IRA Income Limits for 2025 (Married Filing Jointly)
A Roth IRA may be reduced or unavailable once your household income reaches certain levels.
✅ If your joint MAGI is $236,000 or less, you can contribute up to the full annual limit — $7,000 (or $8,000 if age 50 or older).
✅ If your joint MAGI is over $236,000 but under $246,000, your contribution limit is phased out and reduced proportionally.
❌ If your joint MAGI is $246,000 or more, you cannot contribute to a Roth IRA for that tax year.
📝 Note: These income thresholds are adjusted periodically for inflation, so it is important to check the current IRS limits each year before making a contribution.
Traditional IRA Income Limits for 2025 (Married Filing Jointly)
You can make a Traditional IRA contribution regardless of income. However, your tax deduction for that contribution depends on your joint income and whether you or your spouse are covered by a workplace plan.
If both spouses are covered by a workplace plan:
✅ Full deduction available if joint MAGI is $126,000 or less.
✅ Partial deduction if joint MAGI is over $126,000 but under $146,000.
❌ No deduction if joint MAGI is $146,000 or higher.
Traditional IRA Income Limits When Only One Spouse Is Covered by a Workplace Plan (Married Filing Jointly)
If only one spouse is covered by a retirement plan at work, the IRS gives the couple higher income thresholds for claiming a deduction.
✅ Full deduction available if joint MAGI is $236,000 or less.
✅ Partial deduction if joint MAGI is over $236,000 but under $246,000.
❌ No deduction if joint MAGI is $246,000 or higher.
📝 Note: MAGI represents your adjusted gross income (AGI) plus certain deductions and exclusions. It is used to determine IRA contribution and deduction eligibility. Calculating it correctly can help you avoid excess contributions or penalties.
How to Open a Spousal IRA
Setting up a spousal IRA works the same way as opening any Traditional or Roth IRA. The key difference is that contributions are made on behalf of a spouse with little or no income, as long as both partners file a joint tax return.
To begin, decide which IRA type fits your goals — Traditional, Roth, or a mix of both — then choose a trusted financial institution that offers IRAs. Once the account is open, you can set up contributions for each spouse separately.
📌 Also read: Roth vs Traditional IRA
Who Owns the Assets in a Spousal IRA?
Ownership always belongs to the account holder, not the contributing spouse. If you are the working spouse contributing to your partner’s IRA, those funds and any future earnings belong to your spouse. They decide how to invest their account and have full control over the assets.
This separation can be beneficial for long-term financial planning because each spouse retains independent control of their retirement funds.
Can a Spousal IRA Be a Roth IRA?
Yes. You may open a spousal IRA as either a Traditional IRA or a Roth IRA, depending on your income level and tax preferences. Some couples choose both to balance current tax deductions and future tax-free withdrawals.
📝 Note: A Roth IRA may provide tax-free withdrawals in retirement, but contributions are made with after-tax dollars. A Traditional IRA may provide an immediate tax deduction, but withdrawals are taxed as ordinary income later.
When Can You Withdraw From a Spousal IRA?
Spousal IRAs follow the same withdrawal rules as any other IRA. The rules depend on whether it’s a Traditional or Roth IRA.
Withdrawing From a Spousal Traditional IRA
You can start qualified withdrawals once you reach age 59½. Withdrawals before that age usually trigger a 10% early withdrawal penalty and ordinary income tax on the amount withdrawn.
After age 59½, qualified distributions are penalty-free, though they remain subject to ordinary income tax.
✅ Required Minimum Distributions (RMDs):
Traditional IRAs require withdrawals starting at age 73. The RMD amount is based on your life expectancy and account balance.
📌 Also read: Traditional IRA Withdrawal Rules
Withdrawing From a Spousal Roth IRA
A Roth IRA offers more flexibility with withdrawals:
✅ You may withdraw your contributions (the money you put in) at any time, tax- and penalty-free.
❌ To withdraw earnings, the account must be at least 5 years old, and you must be at least age 59½.
If you withdraw earnings earlier, you will generally owe both income tax and a 10% penalty.
📝 Note: A Roth IRA has no lifetime RMDs for the original account owner, which can make it useful for long-term estate or legacy planning. However, beneficiaries who inherit a Roth IRA may still be subject to RMD rules.
📌 Also read: Roth IRA Withdrawal Rules
Wrapping It Up
A spousal IRA gives couples a simple way to keep both partners on track for retirement. It allows a working spouse to help a non-working or lower-earning partner save for the future, creating more balance and flexibility in long-term planning.
Choosing between a Traditional or Roth IRA depends on your income and tax goals. Take time to review your options each year and make sure your contributions align with current IRS limits. When in doubt, it may help to speak with a qualified tax professional before making changes.
Disclaimer:
The Carry Learning Center is operated by The Vibes Company Inc. (“Vibes”) and contains generalized educational content about personal finance topics. While Vibes provides educational content and technology services, all investment advisory services discussed on this website are provided exclusively through its wholly-owned subsidiary, Carry Advisors LLC (“Carry Advisors”), an SEC registered investment adviser. The information contained on the Carry Learning Center should not be construed as personalized investment advice and should not be considered as a solicitation to buy or sell any security or engage in a particular investment, accounting, tax or legal strategy. Vibes is not providing tax, legal, accounting, or investment advice. You should consult with qualified tax, legal, accounting, and investment professionals regarding your specific situation.
The accounts, strategies and/or investments discussed in this material may not be suitable for all investors. All investments involve the risk of loss, and past performance does not guarantee future results. Investment growth or profit is never a guarantee. All statements and opinions included on the Carry Learning Center are intended to be current as of the date of publication but are subject to change without notice.
To access investment advisory services through Carry Advisors, you must be a client of Vibes on an eligible membership plan. For more information about Carry Advisors’ investment advisory services, please see our Form ADV Part 2A brochure and Form CRS or through the SEC’s website at www.adviserinfo.sec.gov.