A little-used Individual Retirement Account (IRA) rule could help one-income couples shelter far more for retirement before the 2025 contribution window closes. Experts say many households still do not realise that both spouses can save, even if only one is earning.
A spousal IRA is one of those personal finance rules that sounds niche but can make a real difference. Under IRS rules, a married couple filing jointly may contribute to an IRA for a spouse without taxable compensation, provided the working spouse earns enough to cover both contributions. For 2025, the limit is $7,000 per person, or $8,000 for those aged 50 and over.
That means a couple aged 50 or above could put away up to $16,000 across two tax-advantaged accounts for the 2025 tax year. The deadline to make a 2025 traditional or Roth IRA contribution is 15 April 2026.
An Overlooked Opportunity in the Retirement System
Despite being available for decades, the spousal IRA remains one of the most underused features of the retirement system. 'Spousal IRAs are one of the most overlooked tax breaks in retirement planning,' says Randy Bruns, founder of the advisory firm Model Wealth in Naperville, Illinois.
Under the rule, as long as the working spouse earns enough income, both partners can contribute to their own IRA accounts. This means the household can benefit from the tax advantages of two retirement accounts rather than one.
For the 2025 tax year, individuals can contribute up to $7,000 to an IRA. Those aged 50 and older can add an additional $1,000 catch-up contribution, bringing the limit to $8,000 per person. For older married couples, that translates to as much as $16,000 in tax-advantaged retirement savings in a single year. Over time, those additional contributions — combined with investment growth — can add tens of thousands of dollars to a household's retirement fund.
Valuable Tool for One-Income Households
The benefit is particularly important for couples where one partner temporarily leaves the workforce. That situation is increasingly common — whether due to childcare, caregiving responsibilities, education, or relocation. 'Spousal IRAs can help keep retirement planning on track when one partner steps away from paid work,' says Otto Rivera, principal at advisory firm Mindful Wealth in the greater Orlando, Florida, area.
Without this option, non-working spouses may lose years of retirement contributions, potentially leaving them with smaller savings later in life. Rivera says many couples simply assume retirement accounts must be funded from their own personal income.
'I wish more couples knew about it,' he says.
Retirement Accounts Are Growing — But Contributions Lag
The broader retirement system continues to expand. According to the Investment Company Institute, roughly 57.9 million US households owned IRAs as of mid-2024, the highest level on record. Yet many investors are not actively contributing to those accounts.
The same report found that only about 37% of households with IRAs were making ongoing contributions. Much of the growth in IRA balances has instead come from rollovers from workplace retirement plans, such as 401(k)s, rather than new savings.
Despite that trend, average balances have continued to rise. Data from Fidelity Investments shows the average IRA balance reached $137,095 by the end of 2025, up about 7% from the previous year. Financial advisers say the figures highlight an important lesson: consistent annual contributions remain one of the most effective ways to build retirement wealth over time.
Greater Tax Flexibility in Retirement
Beyond boosting savings, spousal IRAs can also help couples manage future tax bills. 'Many households already have substantial pre-tax savings through employer retirement plans,' says Christopher Giambrone, co-founder of advisory firm CG Capital in New Hartford, New York. Traditional IRA contributions often provide an upfront tax deduction, but withdrawals during retirement are taxed as ordinary income.
Roth IRAs work differently. Contributions are made with after-tax money, but qualified withdrawals later in life are tax-free. By holding a mix of traditional and Roth retirement accounts, couples can create what advisers call 'tax diversification'. This flexibility allows retirees to adjust which accounts they withdraw from — potentially reducing their overall tax burden.
What Couples Should Do Before The Deadline
The first step is checking eligibility. The couple must be married, file jointly and have enough taxable compensation to support both contributions combined. After that, the real decision is whether the second account should be traditional or Roth, based on income, tax position and time horizon.
The window for 2025 contributions closes on 15 April. After that, the chance to top up last year's savings is gone.
With rising living costs and competing financial pressures, retirement planning can easily slip down the priority list. But advisers say even a relatively simple move, like funding a spousal IRA, can have a meaningful impact on a household's financial future. Sometimes, the most effective financial strategies are also the simplest.
For couples who have spent years thinking retirement planning starts and ends with the breadwinner's pension, this is the sort of overlooked move that can quietly matter later.
Originally published on IBTimes UK
