Millions of Americans work in the home without getting paid. According to the Pew Research Center, 18% of parents are stay-at-home moms and dads. Beyond parenting, millions of adults care for elderly relatives or siblings with special needs without receiving a paycheck. While this unpaid work often saves families thousands of dollars a month, it can make saving for retirement a challenge.
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Personal finance expert Suze Orman understands that earned income isn’t always a reality. In her recent blog, “Boost Retirement with a Spousal IRA,” she explains how non-working spouses can still build retirement savings.
The Hardest Job in the World
Few would argue that staying at home to care for a child, parent or loved one isn’t demanding. If stay-at-home parents were compensated for all the work they do, Salary.com estimates their median annual salary would be $184,820.
In reality, caregivers remain on call 24 hours a day, with no overtime, paid benefits or raises. And because they don’t receive earned income, they typically can’t contribute to an Individual Retirement Account (IRA). However, there is one option: A spousal IRA, which allows a non-working spouse to contribute as long as their partner has earned income.
What Is a Spousal IRA?
As reported by U.S. News & World Report, the IRS allows a working spouse to make an IRA contribution on behalf of a spouse who isn’t working, often referred to as a Spousal IRA. For 2025, a person who is 49 years or younger may contribute $7,000 to an IRA, and a person who is 50 years old or older may contribute $8,000.
This means an eligible couple could contribute as much as $16,000 combined, depending on age. With a traditional IRA, contributions are tax-deductible in the year they are made, but withdrawals in retirement are taxed.
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Can a Non-Working Spouse Contribute To a Roth IRA?
Many people are aware of the tax advantages associated with a Roth IRA. Unlike a traditional IRA, where taxes are deferred until withdrawal, money contributed to a Roth IRA is done with income that has already been taxed. Therefore, there aren’t any immediate tax benefits, but when the money is withdrawn, it is done 100% tax-free.
While this may be ideal for some couples, there are limitations as to who can contribute to a Roth IRA. As noted in Orman’s article, the joint modified adjusted gross income (MAGI) must be below $236,000 for a couple to contribute the maximum to a Roth IRA in 2025.
Can All Non-Working Spouses Contribute To an IRA?
While many non-working spouses with a spouse who has earned income will be able to take advantage of a spousal IRA, there are some rules. First, the couple must be married and file a joint federal tax return. Second, the tax return must show earned income from at least one spouse.
It is important to note that while many people may be able to take advantage of a Spousal IRA, it is always best to consult with a tax professional before filing. A tax expert can help provide guidance on the legalities behind a Spousal IRA and ensure that all qualifying criteria are met.
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This article originally appeared on GOBankingRates.com: Suze Orman: How To Boost Retirement Savings With a Spousal IRA
