How a spousal IRA can help couples build retirement savings

When you’re in the middle of your career, retirement planning may start to feel more real. You’re also likely juggling competing priorities, like mortgage payments, raising children, and caring for aging parents, all while trying to save for retirement.

At this stage, it’s not unusual for one spouse to move to part-time work, step out of the workforce, or earn significantly less. This can create a retirement savings gap for one partner. How can you avoid this gap? Enter the spousal IRA. 

A spousal IRA isn’t a special account—it's a rule that allows a working spouse to contribute to a traditional or Roth IRA for their partner, even if the partner has little to no earned income of their own. 

To be eligible to open an IRA on behalf of your partner, you must:

•    Be married and filing taxes jointly
•    Earn enough income to cover contributions for both accounts
•    Have separate IRA accounts (not shared accounts)

This allows the working spouse to contribute up to the annual IRS limit in two separate accounts, which means you can double your household IRA contributions each year. 

A spousal IRA helps you think beyond individual accounts and focus on total household savings by keeping both you and your spouse invested in long-term growth. It can prevent lost years of compounding for a non-working partner and create flexibility and tax options in retirement.

See the difference a spousal IRA can make for total household retirement savings in this example:

Spousal IRA vs. no spousal IRA
Let’s pretend you’re part of a married couple with one working spouse and one non-working spouse.

Scenario 1: One account in the working spouse’s name
Working spouse’s annual IRA contribution: $7,500
Potential total IRA account balance after 30 years: $611,000

Scenario 2: Two accounts (one for each partner, using a spousal IRA)
Working spouse’s annual IRA contribution: $7,500
Working spouse’s annual contribution into spousal IRA: $7,500
Total annual contribution: $15,000 
Potential total of IRA account balances after 30 years: $1,222,000

By saving for both spouses instead of just one, you could potentially double your total IRA account balances over the same time period.

A spousal IRA can be either traditional or Roth, and the right strategy for you depends on your goals. In a traditional IRA, contributions may reduce taxable income today and withdrawals are taxed later. In a Roth IRA, contributions are made after taxes and withdrawals are tax-free.

Which type of IRA you choose really depends on your income, future expected income, and tax planning considerations. If you expect to be in a higher tax bracket in retirement, a Roth IRA may be a better choice since you’ll pay taxes now at a lower rate and withdraw tax-free later.

On the other hand, if you expect to be in a lower tax bracket in retirement, it might make sense to choose a traditional IRA and get a tax break today while paying less tax later.

If you’re unsure whether you’ll be in a higher tax bracket in retirement or you want to add flexibility to your retirement savings, you can consider splitting your IRA contributions 50/50 between traditional and Roth savings.

A spousal IRA may work best as part of a broader savings strategy. You might consider maximizing your employer 401(k) match, then funding tax-advantaged accounts, including IRAs. Additional savings could go into taxable accounts. Building a mix of account types may provide more opportunities to save and greater flexibility when accessing assets.

Think of a spousal IRA as a bridge that may complement your overall retirement approach. A 401(k) plan is typically your core savings. IRAs—including spousal IRAs—can help fill gaps, allow for additional savings, and expand flexibility by offering different tax advantages. Together, you can maximize tax efficiency and support your goals.