Boost Retirement with a Spousal IRA

You know that a Roth IRA is a fantastic way to save for retirement. But one catch is that you must have earned income to be able to contribute to any type of IRA. I know there are many of you who work hard, but not in a paying job, whether it’s running your household or caring for a loved one.

I want you to know that if you are married, you can still contribute to an IRA if your spouse has earned income.

This option is called a Spousal IRA. And I want every married household where one spouse doesn’t work for pay to seriously consider having that spouse contribute to a Spousal IRA.

Spousal IRA Rules

• You must be married and file a joint federal tax return.
• That joint tax return must show earned income (from earnings of the other spouse). 
• In 2025, you can save $7,000 in an IRA if you are younger than 50 years old, or $8,000 if you are at least 50.
• In 2025, if your joint modified adjusted gross income (MAGI) is below $236,000 you can contribute the maximum to a Roth IRA.

If you qualify for a Roth IRA, that’s a great way to build up tax-free retirement savings. Money you contribute to a Roth IRA comes from after-tax income, which means there is no upfront tax break. The payoff comes in retirement: all withdrawals from a Roth IRA will be 100% tax-free if you wait until you are at least 59 ½ and the account is at least 5 years old. 

And it’s important to know that the money you contribute (but not the earnings on that contribution) can be withdrawn at any time, without tax or an early withdrawal penalty. That’s because the contribution is made from money that has already been taxed. I hope you won’t touch the money you contribute to a Roth IRA until you are retired. But I also want you to understand the rules, because in a bona fide emergency, the ability to use contributions to a Roth IRA without tax or penalty can be a valuable option.

Another advantage of a Roth IRA is that the IRS does not make you take annual required minimum distributions (RMDs). With a Roth IRA, you only have to make withdrawals if and when you want to use the money. That’s a lot different from Traditional IRAs, which are subject to annual RMDs so the IRS can collect tax on the amount withdrawn. (For anyone born in 1960 or later, RMDs from traditional IRAs and 401(k)s must be taken once you turn 75). 

A Spousal IRA is a fantastic way for a caregiver (kids, elderly parents) not currently in the workforce to help build household retirement security. Managing to save $8,000 a year for 10 years and earning an annualized 7% return will give your household more than $230,000 in tax-free retirement savings in 20 years.