How does a Spousal IRA Work?
Spousal IRAs offer a unique advantage for couples where one spouse has little to no earned income. As long as the couple files a joint tax return, the working spouse can contribute to a Spousal IRA on behalf of the non-working or lower-earning spouse.
The contribution limits for Spousal IRAs are the same as for individual IRAs. For 2024, this means the working spouse can contribute up to $6,500 to the Spousal IRA, and if both spouses are over 50, the catch-up contribution rules apply, allowing up to $7,500. This means a couple can potentially contribute $15,000 annually if both are eligible for catch-up contributions.