We believe that for many couples, retirement planning is best accomplished as a team effort—even when only one person is earning income. A spousal IRA may give you an appropriate way to build long-term wealth together, even if one spouse is out of the workforce. Whether you’re raising kids, going back to school, or simply transitioning between jobs, this strategy may help keep both spouses on track working towards a secure retirement. But how does it work? And how do you make the most of it? Here are the essentials you need to know:
What Is a Spousal IRA?
A spousal IRA lets a working spouse contribute to an IRA on behalf of a non-working or low-earning spouse. You must file a joint tax return, and your combined earned income is enough to cover both contributions. Many people find a spousal IRA so beneficial because:
- Each spouse gets their own IRA (it’s not a joint account).
- You can double your annual IRA contributions as a household.
- It keeps retirement momentum going, even during life’s pauses.
For 2025, you can contribute:
- Up to $7,000 per person under age 50.
- Up to $8,000 per person if age 50 or older.
That’s a total of $14,000–$16,000 per couple, assuming enough earned income.
Who’s Eligible and What Are the Rules?
Not everyone can open or contribute to a spousal IRA. But if you meet the criteria, the setup is simple:
- Married filing jointly is required—separate filers are not eligible.
- The working spouse must have taxable earned income (wages or self-employment income). Investment income and Social Security benefits don’t count.
- The total IRA contributions can’t exceed the couple’s combined earned income.
Each IRA is individually owned. The non-working spouse controls their own account, chooses investments, and names beneficiaries. Aside from the flexibility perks, this also keeps retirement security personal and protected.
Traditional vs. Roth: Which Is Better?
Many Springfield clients come to us wondering whether a traditional IRA or Roth is better in this situation. It depends heavily on your income level and your tax outlook in retirement, which is why we believe speaking with a retirement advisor is a must. Here’s what to know about a traditional spousal IRA:
- Contributions may be tax-deductible.
- Withdrawals are taxed as income.
- Best for couples who expect to be in a lower tax bracket later.
- If neither spouse has a workplace plan, contributions are fully deductible, regardless of income.
Here’s what to know about a Roth spousal IRA:
- Contributions use after-tax dollars.
- Withdrawals are tax-free if qualified.
- May be better for couples who expect higher taxes in retirement.
- For 2025, full contributions phase out starting at $218,000 and end at $246,000 MAGI for joint filers. [1]
And remember, you can mix and match. One spouse can have a Roth, the other a traditional IRA, depending on what serves your goals best.
Strategies to Maximize a Spousal IRA in 2025
Consider getting the most from your spousal IRA. Consider:
- Contributing Early: Consistent, long-term investing means more time for compounding.
- Revisiting Your Investment Strategy: Align each account with the owner’s age, risk tolerance, and expected retirement horizon.
- Catching Up if You’re Over 50: That extra $1,000 per year per person can really add up.
- Avoiding Overcontributions: Exceeding limits triggers a 6% penalty. Review income estimates and adjust as needed.
- Saving During Career Breaks: This is what makes Spousal IRAs such a vital tool, especially for couples navigating caregiving, health issues, or education.
Plan Your Retirement With Confidence, Right Here in Springfield
At LaTour Asset Management, LLC in Springfield, we’ve helped local couples use spousal IRAs to help close retirement savings gaps, helping them feel more financially equal in retirement. But the rules can get tricky fast, especially when household income fluctuates or tax situations change.
Don’t guess. Consider talking with our experienced advisors to find out how a Spousal IRA fits into your broader retirement plan. Call us today at (877) 888-5724 to get started with a strategy that helps protect the future you’ve worked hard for.
[1] IRS Publication 590-A
