Not all married couples earn dual incomes. For example, during the course of a marriage, one spouse may leave the workforce to care for a family member or tend to his or her own health issues. Regardless of why you left and whether it's temporary or long-term, you might still want to save for retirement while your spouse continues working.
The good news is you can do just that with a "spousal" IRA — which, among other requirements, must be set up in the nonworking spouse's name. Even better, you generally have until April 15, 2026, to make eligible IRA contributions for 2025. In some situations, these contributions can reduce taxable income when filing your 2025 joint return. Let's dive into what you and your working spouse need to know.
For the 2025 tax year, a nonworking spouse can potentially make a deductible traditional IRA contribution of up to $7,000 ($8,000 for individuals who were age 50 or older as of December 31, 2025). However, to make a spousal IRA contribution, you must meet two requirements:
But here's where it gets a bit tricky. If your working spouse participates in a qualified retirement plan through a job or self-employment, the deductibility of your spousal IRA contribution is phased out for the 2025 tax year between joint modified adjusted gross income (MAGI) of $236,000 to $246,000. Contact your tax advisor for help calculating MAGI for this purpose.
If your working spouse is not covered by a qualified retirement plan through a job or self-employment, you — as the nonworking spouse — can make a deductible traditional IRA contribution. In this situation, there are no limitations on your joint MAGI.
For instance, say you're a stay-at-home parent who's 40 years old. You and your spouse file jointly, and your joint MAGI is $230,000 for 2025. All income comes from your spouse's employer, which sponsors a qualified retirement plan that your spouse participates in, but you don't. In this scenario, for the 2025 tax year, you can make a deductible contribution of up to $7,000 to a traditional spousal IRA because your joint MAGI is below the $236,000 deduction phaseout threshold, and your spouse supplies the requisite earned income.
Alternatively, under the same circumstances, let's say your joint 2025 MAGI is $250,000. In this case, you can't make a deductible contribution to a traditional spousal IRA because your joint MAGI exceeds the $246,000 deduction phaseout ceiling. However, you can make a nondeductible contribution regardless of how high your joint MAGI might be.
Now let's look at things from your working spouse's perspective. If neither you nor your partner participates in a qualified retirement plan through a job or self-employment, your working spouse can make a deductible contribution of up to $7,000 for the 2025 tax year to a traditional IRA set up in his or her name. The limit increases to $8,000 if your spouse was age 50 or older as of December 31, 2025. The only limitation is that you must together have enough earned income to at least match the combined amount of your contributions. All the requisite earned income can come from the working spouse.
On the other hand, say your working spouse does participate in a qualified retirement plan. In this case, his or her ability to make a deductible traditional IRA contribution for the 2025 tax year is phased out between joint MAGI of $126,000 and $146,000.
Timothy and Tamara are joint filers who turned 40 in 2025. The couple has a joint MAGI of $175,000 for 2025. All the couple's income comes from Tamara's employer, which sponsors a qualified retirement plan that she participates in, but Timothy doesn't participate in a plan. For the 2025 tax year, Tamara, the working spouse, can't make a deductible traditional IRA contribution because the couple's joint MAGI exceeds the applicable deduction phaseout ceiling ($146,000). However, she can make a nondeductible contribution to a traditional IRA.
As the nonworking spouse, Timothy can make a deductible contribution of up to $7,000 to an eligible traditional spousal IRA. Why? Because the couple's joint MAGI is below the deduction phaseout threshold for nonworking spouses ($236,000).
Here's a different example: Addie, a 35-year-old nonworking spouse, and Adam, her 40-year-old working spouse, have a joint MAGI of $800,000 for 2025. Neither Addie nor Adam participates in a qualified retirement plan. Despite the couple's high joint MAGI, they can each make a deductible traditional IRA contribution of up to $7,000 for the 2025 tax year.
Tax deductibility isn't an issue with Roth IRA contributions. You make those contributions with after-tax dollars, and you're subject to the same annual contribution limits as those for traditional IRAs. The Roth IRA tax advantage is at the back end. You can withdraw all your Roth account earnings — along with the sum of your annual contributions — tax-free after age 59½ as long as you've had at least one Roth IRA open for more than five years. Withdrawals that pass these tests are called "qualified Roth distributions."
However, eligibility to contribute to a Roth IRA for the 2025 tax year is phased out between MAGI of $236,000 to $246,000 for joint filers. Also, you must have enough earned income to at least match the combined amount of Roth contributions made by you and your spouse. Again, all the earned income can come from one working spouse. Roth IRA contribution eligibility doesn't depend on whether you or your spouse participates in a qualified retirement plan.
Important: Be aware that the $7,000 contribution limit ($8,000 if you were age 50 or older as of December 31, 2025) is the combined limit for traditional IRA contributions (whether deductible or not) and Roth IRA contributions for the 2025 tax year. So, if you contribute the maximum to a Roth IRA, you can't contribute anything to a traditional IRA. If you contribute the maximum to a traditional IRA, you can't contribute anything to a Roth IRA.
If your joint MAGI is too high to make a deductible traditional IRA contribution, but low enough to make a Roth contribution, it's often better to make a Roth contribution rather than a nondeductible traditional IRA contribution. The reason: You can withdraw accumulated Roth account earnings as tax-free qualified distributions — assuming you pass the qualified distribution tests. In contrast, earnings that accumulate in a traditional IRA, including one funded solely with nondeductible contributions, are fully taxable when withdrawn.
Even if your joint MAGI permits making deductible traditional IRA contributions, you may still want to consider making Roth IRA contributions, depending on your current and expected future tax bracket. After all, a Roth IRA features future tax-free withdrawals while a traditional IRA only sets you up for future taxable withdrawals.
Leaving the workforce doesn't mean you have to stop saving for retirement. However, as you can see, the rules for contributing to traditional and Roth IRAs can be complex depending on your situation. For best results, work closely with your tax advisor to make decisions that achieve your retirement goals and optimize your tax outcomes.
What are the limits on traditional IRA contributions if both you and your spouse work? If both spouses participate in qualified retirement plans, the $126,000 to $146,000 joint modified adjusted gross income (MAGI) deduction phaseout range applies to both spouses for the 2025 tax year.
For example, suppose you and your spouse both work and participate in qualified retirement plans. If your joint MAGI was $150,000 for 2025, neither you nor your spouse can make a deductible traditional IRA contribution for the 2025 tax year, because your joint MAGI exceeds the ceiling of the deduction phaseout range ($146,000).
However, if your joint MAGI was $126,000 or below, you can make a deductible contribution of up to $7,000 for the 2025 tax year ($8,000 if you were age 50 or older as of December 31, 2025). The same is true for your spouse.
What if you and your spouse work, but only one of you participates in a qualified retirement plan? In that case, the participating spouse's ability to make a deductible traditional IRA contribution for the 2025 tax year is subject to the $126,000 to $146,000 joint MAGI deduction phaseout range. Meanwhile, the nonparticipating spouse falls within the $236,000 to $246,000 deduction phaseout range.
Let's say you and your spouse both work, but only your spouse participates in a qualified retirement plan. Your joint MAGI is $230,000 for 2025. Here, your spouse can't make a deductible traditional IRA contribution for the 2025 tax year because your joint MAGI exceeds the applicable $146,000 deduction phaseout ceiling. However, your spouse can make a nondeductible contribution of up to $7,000 ($8,000 if he or she was age 50 or older as of December 31, 2025).
Meanwhile, you can make a deductible contribution because your joint MAGI is below the $236,000 floor for the deductible contribution phaseout range that applies to a working spouse who doesn't participate in a tax-favored retirement plan. In fact, you can contribute and deduct up to $7,000 ($8,000 if you were age 50 or older as of December 31, 2025).