A “spousal” Individual Retirement Account (IRA) allows a spouse with little or no compensation from employment to open an IRA in their name and make contributions based on the other spouse’s income.
This offers spouses filing joint tax returns the opportunity to put aside more tax‑advantaged savings than funding only one IRA. This quick guide may help you evaluate whether a spousal IRA could be beneficial for you.
How could you benefit from funding a spousal IRA?
Couples usually need to accumulate substantial pools of assets to fund retirement. Opening and funding a spousal IRA may allow more of your assets to grow tax‑deferred (Traditional IRA) or tax‑free (Roth IRA) provided applicable requirements are met. Depending on the type of IRA and your income level, your contributions may be tax‑deductible, potentially reducing your taxable income for the current tax year.
When is the deadline to contribute?
The deadline to contribute to an IRA (spousal or not) is typically April 15 of the following year, which generally aligns with the federal tax‑filing deadline. For example, you can complete a contribution for the 2026 tax year up until April 15, 2027. Be sure to designate whether your contribution is for the current or prior tax year.
What type of IRA is it — Roth or Traditional?
A spousal contribution may go into either a Traditional or Roth IRA (if eligibility requirements are met). Your choice will depend on your current marginal income tax bracket and your expectations for your future tax rate.
Under the SECURE Act, there is no age limit for making contributions to either Traditional or Roth IRAs, as long as you have eligible compensation (or, in the case of a spousal IRA, your spouse does).
What is the most you can contribute in 2026?
For 2026, the maximum IRA contribution is:
- $7,500 for individuals under age 50
- $8,600 for individuals age 50 or older (includes the $1,100 catch‑up)
These limits apply per person, so a couple may contribute up to $15,000 (or $17,200 if both spouses are 50+) across two IRAs, assuming they have sufficient taxable compensation.
Traditional IRA deductibility may depend on whether the earning spouse is covered by an employer‑sponsored retirement plan and the couple’s Modified Adjusted Gross Income (MAGI).
Roth IRA eligibility is also based on MAGI. If your income exceeds the IRS phase‑out range, your ability to contribute directly to a Roth IRA may be reduced or eliminated.
How should a spousal IRA be invested?
In general, a spousal IRA follows the same investment approach you use for your other retirement accounts. The tax‑advantaged nature of IRAs makes them attractive vehicles for investments that may generate interest, dividends, or capital gains. Higher‑yielding or more actively traded investments may be better suited to an IRA, since the income they produce could otherwise be taxable in a non‑retirement account. As always, your overall allocation should reflect your goals, risk tolerance, and time horizon.
How might a spousal IRA affect your estate planning?
You should take the same care designating beneficiaries for a spousal IRA as you would for any other retirement account. While many account owners name their spouse as the primary beneficiary, you may choose someone else depending on your planning goals. Review your beneficiary designations periodically, especially in light of the SECURE Act’s 10‑year distribution rule for many non‑spouse beneficiaries. It may be helpful to discuss your designations with your estate planning attorney.
When might a spousal IRA not be right for you?
Withdrawing early from an IRA may lead to penalties and potentially higher taxable income. While there are exceptions to the early‑withdrawal rules, IRAs are generally intended for long‑term savings and investment. If you anticipate needing access to these funds before age 59½, a retirement account may not be the best vehicle. Required Minimum Distributions (RMDs) may apply to Traditional IRAs beginning at age 73 or 75 depending on your birth year, so it’s also important to consider whether you’re comfortable with the timing of future mandatory withdrawals.
If you’re unsure how a spousal IRA might support your long‑term goals, or you’d like to review how it fits within your overall plan, we’re always available to talk through it with you.
