When you think of retirement savings in the United States, the Individual Retirement Account (IRA) immediately springs to mind. This tax-advantaged savings account is a mainstay of retirement planning for millions of Americans.
Yet there’s a variant that’s often overlooked, but essential for many couples: the Spousal IRA. Designed to enable a spouse with no or low income to benefit from the same tax advantages as an employee, this arrangement plays a key role in long-term financial security.
In most cases, the ability to contribute to an IRA is dependent on taxable income. This poses a problem when one spouse chooses to stay at home, for example to raise children or care for a relative, and therefore has no income to declare.
The risk then is that the financial horizon for retirement may be weakened by the lack of dedicated savings.
The Spousal IRA meets this need. It allows a spouse who works and generates sufficient income to contribute not only to his or her own IRA account, but also to that of his or her partner.
This mechanism ensures that both members of the couple have personal savings for retirement, reinforcing the financial independence and stability of the household.
How it works and the rules to know
In practical terms, the Spousal IRA is not a separate product: it is a Traditional IRA or Roth IRA opened in the name of the non-earning spouse.
The difference lies in the origin of the funds. To be eligible, the couple must be legally married and file a joint tax return.
The contribution limit is identical to that of other IRAs ($7,000 per year in 2025, or $8,000 for those over 50 thanks to the “catch-up” mechanism).
These amounts can be contributed by the working spouse, as long as his or her taxable income covers all the couple’s contributions.
Tax advantages remain unchanged, with deductions possible for a Traditional IRA and tax-free growth for a Roth IRA.
However, certain income limits apply, particularly for tax deductions, and must be checked each year.
A major asset for retirement planning
The Spousal IRA illustrates just how important financial planning is for both spouses. Too often, only one income is taken into account in the retirement planning strategy, which can leave the inactive spouse vulnerable in the event of divorce or death.
With this system, couples can balance their savings and ensure that each has individual resources at their disposal when they retire.
This approach also maximizes tax benefits. By doubling contributions, a couple can set aside up to $14,000 a year (or $16,000 after age 50), while potentially reducing their taxable income.
Over the long term, the cumulative effect is considerable, especially if investments grow over several decades.
A complement to Social Security
The American public pension, Social Security, remains an essential source of retirement income, especially for spouses who have worked little or not at all.
However, it is rarely sufficient to maintain the desired standard of living. In such cases, the Spousal IRA is an indispensable complement, as it enables the generation of independent, flexible private capital.
By combining Social Security benefits with the savings accumulated in a Spousal IRA, couples build a much more solid financial base, better adapted to life’s ups and downs.
Spousal IRA: A tool not to be overlooked
Often underestimated, the Spousal IRA is a key asset planning tool. It corrects an injustice by allowing the non-earning spouse to save for his or her retirement, while reinforcing the couple’s financial stability.
At a time when life expectancy is increasing and economic uncertainties are weighing on the future of public pensions, it would be a mistake to neglect this tool.
For any American couple wishing to actively prepare for the future, the Spousal IRA is not simply a bonus, but an essential retirement planning strategy, on a par with a 401(k) plan or personal savings.
IRAs FAQs
An IRA (Individual Retirement Account) allows you to make tax-deferred investments to save money and provide financial security when you retire. There are different types of IRAs, the most common being a traditional one – in which contributions may be tax-deductible – and a Roth IRA, a personal savings plan where contributions are not tax deductible but earnings and withdrawals may be tax-free. When you add money to your IRA, this can be invested in a wide range of financial products, usually a portfolio based on bonds, stocks and mutual funds.
Yes. For conventional IRAs, one can get exposure to Gold by investing in Gold-focused securities, such as ETFs. In the case of a self-directed IRA (SDIRA), which offers the possibility of investing in alternative assets, Gold and precious metals are available. In such cases, the investment is based on holding physical Gold (or any other precious metals like Silver, Platinum or Palladium). When investing in a Gold IRA, you don’t keep the physical metal, but a custodian entity does.
They are different products, both designed to help individuals save for retirement. The 401(k) is sponsored by employers and is built by deducting contributions directly from the paycheck, which are usually matched by the employer. Decisions on investment are very limited. An IRA, meanwhile, is a plan that an individual opens with a financial institution and offers more investment options. Both systems are quite similar in terms of taxation as contributions are either made pre-tax or are tax-deductible. You don’t have to choose one or the other: even if you have a 401(k) plan, you may be able to put extra money aside in an IRA
The US Internal Revenue Service (IRS) doesn’t specifically give any requirements regarding minimum contributions to start and deposit in an IRA (it does, however, for conversions and withdrawals). Still, some brokers may require a minimum amount depending on the funds you would like to invest in. On the other hand, the IRS establishes a maximum amount that an individual can contribute to their IRA each year.
Investment volatility is an inherent risk to any portfolio, including an IRA. The more traditional IRAs – based on a portfolio made of stocks, bonds, or mutual funds – is subject to market fluctuations and can lead to potential losses over time. Having said that, IRAs are long-term investments (even over decades), and markets tend to rise beyond short-term corrections. Still, every investor should consider their risk tolerance and choose a portfolio that suits it. Stocks tend to be more volatile than bonds, and assets available in certain self-directed IRAs, such as precious metals or cryptocurrencies, can face extremely high volatility. Diversifying your IRA investments across asset classes, sectors and geographic regions is one way to protect it against market fluctuations that could threaten its health.
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