Spousal IRA.
In plain English
A Spousal IRA is a regular Roth or Traditional IRA held in the name of a non-working or low-earning spouse, funded by the working spouse's earned income. Each spouse counts as having earned income up to the working spouse's total, which means a non-working spouse can contribute the full annual IRA limit ($7,500 in 2026, $8,600 age 50+) using the working spouse's wages. The couple must file a joint federal return to use the spousal contribution rule.
01Why it matters
Spousal IRAs double a couple's tax-advantaged retirement savings room: a working spouse can contribute $7,500 to their own IRA AND $7,500 to the non-working spouse's IRA, on the same household earned income. Over 30 years at 7% returns, that second IRA can compound to over $500,000 of additional retirement assets. Couples where one spouse takes time out of paid work (often for caregiving) routinely under-use this option, leaving meaningful tax-advantaged room on the table.
02The math, step by step
Married couple files jointly: one spouse earns $120,000, the other has no earned income while raising young children. Both can contribute $7,500 to IRAs in 2026 (the working spouse to their own, the non-working spouse to a Spousal IRA), funded entirely from the working spouse's wages. Over 20 years at 7% returns, the Spousal IRA alone grows to approximately $310,000.
03What this is NOT
IRAs are always individually owned; there is no such thing as a 'joint IRA' under federal tax law. A Spousal IRA is an individual account held in the non-working spouse's name; the working spouse's income just provides the funding eligibility, not ownership.
04Receipts
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Plain-English answers from our glossary. Receipts included. Never advice.
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