What is a Spousal IRA?

By Christopher L. Hudson, CIMA

A spousal IRA allows a working spouse to make an annual contribution to an IRA account owned by their non-working, or low earning, spouse to save for retirement.

The spousal IRA is a separate account owned by, and in the name of, the non- working spouse. It is not a joint account. A contribution of $6,500 can be made to the account in calendar year 2023 if the owner of the IRA (the non-working spouse) is under the age of fifty. If the owner of the IRA is fifty or older (again the non-working spouse), then a catch-up contribution of an additional $1,000 can be made bringing the total to $7,500 in 2023. This would allow a couple, both age 50+, to contribute a total of $15,000 to IRA accounts as a household this year.

There are two parameters that you need to be aware of when considering a spousal IRA. The first, is that you must file a joint tax return with your spouse for the year the contribution is made. The second, is that the contributing spouse must have earned income equal to, or greater than, the combined contribution to both accounts ($13,000 if under 50 / $15,000 if 50+).

Opening, and contributing to, a spousal IRA is a great way for married couples to put away money for retirement - even when one of the spouses does not work or does not earn enough income to make a full IRA contribution on their own.

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Any opinions are those of Christopher Hudson and not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected.