Financial Planning Tax Policy

Double Your Family’s Retirement Savings With a Spousal IRA

A Spousal IRA may be right for you if your family only has one income earner.

Saving for retirement can be difficult, especially when one spouse isn’t working. Whether you’re a stay at home mom or a soccer dad, having only one income makes saving for retirement twice as difficult.

For most tax advantageous retirement savings accounts, earned income is a major requirement. But with carefully planned retirement strategies, working families with a stay at home spouse can make retirement possible.

What is a Spousal IRA?

Typically you need earned income to contribute to a Roth or Traditional IRA, but a spousal IRA allows a husband or wife with low or no annual earnings to contribute to a tax-efficient retirement savings account.

Spousal IRA’s, like the name suggest, are individual retirement accounts and not joint retirement accounts. The contributions along with the earnings will be in the spouses name with the spouses social security number.

What are the advantages?

A spousal IRA is a way to potentially double the retirement savings of families with only one income earner. Non-working spouses don’t have access to an employer sponsored 401k plan or a pension plan and will get reduced spousal social security benefits upon retirement.

The maximum contributions allowed for a Roth or Traditional IRA is $5,500 per year but requires earned income. However, spousal IRAs allow non-working spouses to claim their working spouse’s income to determine their own contribution limits. This means couples can contribute up to $11,000 per year into an IRA with only one income earner.


To make an IRA contribution for your spouse, you must meet the following requirements:

  • You must be married.
  • You must file jointly on your tax return.
  • You must have earned income.

Generally, there are two options when considering a spousal IRA – Traditional vs. Roth IRA.

For married couples, the phase-out for contributions to a deductible traditional IRA begins at $101,000 and tops off at $121,000. This means you can make a tax deductible contribution of $5,500 per year if your income falls under $101,000. For income in excess of $101,000 but less than $121,000 the deductible portion is decreased. If your income exceeds $121,000 for 2018 you may still contribute to a traditional IRA however the contributions won’t be tax deductible.

For married couples looking to contribute to a Roth IRA the eligibility requirements are slightly different. For 2018 a couple can make as much as $189,000 and contribute the maximum to a Roth IRA. However, this amount is reduced for those making between $189,000 and $199,000 and is completely eliminated for couples making in excess of $199,000.

Unlike traditional IRAs, those making in excess of the income limits cannot contribute to a Roth IRA directly. However, there are backdoor options for those who contribute to a non-deductible traditional IRA and roll over the account into a Roth IRA.

How to Setup a Spousal IRA

It’s quite simple to set up a spousal IRA if you fall within the eligibility requirements. You can either ask your financial advisor to help you setup an account or you can use sites like Fidelity to set up the account on your own. But before you think of setting up an IRA for yourself or your spouse you want to consult with a financial advisor or tax advisor.

This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer. 

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Jeremias Ramos is a CPA working at a nationally recognized full-service accounting, tax, and consulting firm with offices conveniently located throughout the Northeast. Jeremias specializes in tax and business consulting with focus areas in real estate, professional service providers, medical practitioners, and eCommerce businesses.

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