How to Open a Spousal IRA for Your Partner
Navigate opening a Spousal IRA to build your partner's retirement savings. Understand eligibility, setup, and contribution rules.
A spousal Individual Retirement Account (IRA) allows a working spouse to contribute to an IRA on behalf of a non-working or low-income partner. This enables both spouses to build a retirement nest egg, even if one does not have earned income. It serves as an exception to the general rule that an individual must have earned income to contribute to an IRA.
Spousal IRA Eligibility
To establish a spousal IRA, specific eligibility criteria must be met. The contributing spouse must have earned income at least equal to the combined total of contributions made to both their own IRA and the spousal IRA. The spouse for whom the IRA is opened must have earned income below the annual contribution limit, or no earned income. Couples must be legally married and file federal income taxes jointly.
There is no upper age limit for contributing to a spousal IRA, as long as earned income requirements are met. Roth spousal IRAs are subject to Modified Adjusted Gross Income (MAGI) limitations. For 2025, married couples filing jointly can make a full Roth IRA contribution if their MAGI is less than $236,000. Contributions phase out for incomes between $236,000 and $246,000, and are not permitted if MAGI is $246,000 or more.
Information Needed to Open a Spousal IRA
Gathering personal and financial information for both spouses is important before opening a spousal IRA. This includes full legal names, Social Security Numbers (SSNs), dates of birth, and current residential addresses for both the contributing spouse and the IRA owner. Contact details such as phone numbers and email addresses are also required. Primary and contingent beneficiaries must be designated, including their names, dates of birth, and SSNs.
Funding the account requires bank account and routing numbers for initial contributions. A significant decision is whether to open a Traditional or Roth Spousal IRA. This choice depends on tax considerations, such as anticipating a higher tax bracket now or in retirement, influencing contribution deductibility and future withdrawal tax treatment. Understanding one’s risk tolerance and investment goals is also helpful, as this guides discussions with the financial institution about appropriate investment selections within the IRA.
Opening Your Spousal IRA Account
After gathering information and selecting the IRA type, formally open the account. Choose a financial institution, such as a bank, brokerage firm, or mutual fund company. Consider factors like available investment options, customer service, and fees. Most institutions offer online portals, in-person assistance at a branch, or mail-in forms.
After selecting a provider, complete the application forms accurately with the gathered information. The submission process will vary by institution, with online applications often providing instant confirmation. The initial contribution can then be made, typically through an electronic transfer from a linked bank account. After submission and funding, the account holder can expect to receive confirmation, details on setting up online access, and periodic account statements.
Spousal IRA Contribution Guidelines
Understanding ongoing contribution rules is important after a spousal IRA is established. For 2025, the maximum annual contribution limit to an IRA is $7,000 for individuals under age 50. Individuals aged 50 and older can make an additional $1,000 catch-up contribution, bringing their total annual limit to $8,000. The contribution made to a spousal IRA counts towards the individual retirement account limit for the non-working spouse.
The deadline for contributions for a given tax year is April 15 of the following calendar year, aligning with the federal tax filing deadline. This deadline is not extended even if a tax filing extension is obtained. The total amount contributed to both spouses’ IRAs cannot exceed the earned income of the contributing spouse for that year.