What Is a Spousal IRA?
A Spousal IRA allows a working spouse to contribute to an IRA on behalf of a non-working (or lower-earning) spouse, as long as the couple files taxes jointly. Each spouse can make contributions, within IRS limits, even if one spouse has little or no earned income. Over time this helps both partners build retirement savings.
2025 Contribution Limits
- IRS contribution limit (for Traditional + Roth IRAs combined): $7,000 per person if under age 50; $8,000 if age 50 or older.
- Both spouses together can contribute up to twice the per-person limit (so potentially $14,000, or $16,000 if both are 50+), so long as at least that much earned income exists in the household.
Income Limitations & Phase-Outs (2025)
Here are the income limitations that affect how much you can contribute to Roth IRAs or how much Traditional IRA contributions are tax-deductible. Even with a Spousal IRA, these rules matter.
| Account Type | Filing Status | Income for Full Contribution / Full Deductibility | Phase-Out (Partial) Range | Above Which You Lose Eligibility / Deductibility |
|---|---|---|---|---|
| Traditional IRA deduction (if you or your spouse are covered by a workplace retirement plan) | Single | MAGI ≤ $79,000 | Between $79,000 & $89,000 | MAGI ≥ $89,000 (no deduction) |
| Married filing jointly (both spouses, one or both in plan) | MAGI ≤ $126,000 | Between $126,000 & $146,000 | MAGI ≥ $146,000 (no deduction) | |
| Married filing jointly where you are not covered by a workplace plan but spouse is | MAGI ≤ $236,000 | Between $236,000 & $246,000 | MAGI ≥ $246,000 (no deduction) | |
| Roth IRA contributions | Single / Head of Household / Qualifying Widow(er) | MAGI < $150,000 (full contribution) | Between $150,000 & $165,000 | MAGI ≥ $165,000 (not eligible) |
| Married filing jointly | MAGI < $236,000 | Between $236,000 & $246,000 | MAGI ≥ $246,000 (not eligible) | |
| Married filing separately (if lived with spouse during year) | MAGI < $10,000 (partial) | — | MAGI ≥ $10,000 (no contribution) |
A Note on Married Filing Separately (MFS)
The income limits for those who are Married Filing Separately can feel shockingly low — just $10,000 of modified adjusted gross income before contributions or deductions phase out completely.
Why so strict? The IRS wants to prevent high-income couples from “gaming the system” by filing separately to double up on IRA tax breaks. If you lived with your spouse at any point during the year, the rules are designed to make IRA benefits nearly impossible under MFS.
In practice, very few households intentionally file separately and also use IRAs, because the combination usually leads to worse tax outcomes. The main exceptions are couples with unique situations (such as large medical expenses, liability concerns, or state-specific tax reasons).
Takeaway: If you’re filing separately and lived with your spouse, you’ll likely hit the $10,000 limit very quickly. If you lived apart all year, your IRA rules often look more like the “single” filer limits — a more favorable scenario.
Putting It All Together
- The Spousal IRA makes retirement savings possible for non-working spouses, but the type (Traditional vs Roth) and tax benefit (deductibility) depends on your combined income (MAGI) and whether either spouse is covered by a workplace retirement plan.
- Even if you can’t make a fully deductible Traditional IRA contribution because your MAGI is too high, you might still contribute — it just might be non-deductible. A Roth IRA might also be out of reach if your income is too high, but partial contributions may still be allowed within the phase-out range.
- For high income households, strategies like the “backdoor Roth IRA” (making a non-deductible Traditional IRA contribution, then converting to Roth) may be useful — though there are tax rules to navigate.
Why It Matters
Skipping the Spousal IRA (or misunderstanding the income rules) can mean leaving tax-advantaged savings on the table, sometimes for years. For many couples, especially when one spouse steps out of the workforce (e.g., caregiving, homemaking) or has lower income, Spousal IRAs offer a way to keep both partners contributing and growing their retirement nest egg.
Scenario Spotlight:
Imagine one spouse is working and earns enough, the other doesn’t. If their joint MAGI is under $236,000, both could contribute to Roth IRAs (if that’s the route chosen) or the non-working spouse could contribute via Spousal Traditional or Roth IRA if eligible — getting thousands of dollars of tax-benefits over time.
This material is provided for informational purposes only and is not intended as financial advice. Evergreen Wealth Management does not guarantee investment outcomes. Please consult a qualified professional before making decisions about your personal financial situation.