Spousal IRA Contributions Offer Flexible Retirement Savings Options

A spousal IRA contribution provides an opportunity for individuals to save for retirement by allowing a working spouse to contribute to an IRA on behalf of their nonworking or lower-earning spouse – essentially doubling the household’s retirement savings potential. This option is particularly beneficial for stay-at-home parents or individuals with lower earnings who want to benefit from tax-advantaged retirement accounts.

• Contribution limits: For 2025, the contribution limits for both Traditional and Roth IRAs are $7,000 per person, with an additional $1,000 catch-up contribution available for individuals age 50 or older.
• Qualifying for spousal IRA contributions: The couple must file a joint tax return, and the contributing spouse must have enough earned income to cover both their own contribution and the spouse’s. However, income limits apply, especially for Roth IRAs, which may phase out depending on the couple’s modified adjusted gross income (MAGI).
• Benefits of spousal IRA contributions: By utilizing spousal IRA contributions, couples can strengthen their financial security for retirement, taking full advantage of tax-deferred growth or tax-free distributions depending on the IRA type chosen.

As always, it’s important to consult a financial advisor to determine the best approach based on individual circumstances.