Blog post

Building Wealth as a Couple: The Power of Spousal IRAs

Tandem Staff

Building wealth as a couple is an exciting journey, and in 2024, there are strategic financial tools that can help you secure a brighter future together. One is a Spousal IRA, which is a tax-advantaged retirement account that offers an opportunity for couples where one spouse is not currently employed.

What Is a Spousal IRA?

A Spousal IRA, short for Individual Retirement Account, is a specialized retirement savings account designed for married couples. Its primary purpose is to enable a working spouse to contribute to the retirement savings of their non-working partner. This operates under the same rules and contribution limits as traditional and Roth IRAs.

Qualifying for a Spousal IRA

To be eligible for a Spousal IRA, you and your spouse must file your taxes jointly. This ensures that you meet the standard IRA contribution guidelines.

Ownership of Contributions

One distinctive feature of a Spousal IRA is that the non-working spouse owns the money inside, even though the contributions may originate from the working spouse. This allows non-working partners to build wealth, like a nest egg for retirement, in a tax-advantaged manner, securing their finances independently.

Advantages of a Spousal IRA
  1. Tax Advantages: Spousal IRAs provide tax advantages similar to traditional and Roth IRAs. Depending on the type you choose, you can enjoy tax-deferred growth or tax-free withdrawals during retirement, respectively.
  2. Retirement Security: By investing in a Spousal IRA, non-working spouses can participate actively in building their retirement savings. This ensures financial security for both partners in the long run.
  3. Diversified Retirement Planning: Couples can diversify their retirement planning by having multiple IRAs. This offers flexibility in managing contributions and investments tailored to each spouse's unique financial situation and goals.
How to Get Started
  1. Check Eligibility: Confirm that you meet the requirements for a Spousal IRA by filing joint tax returns and adhering to IRA contribution limits.
  2. Choose the Type: Decide whether a Traditional or Roth Spousal IRA aligns better with your financial goals and tax strategies.
  3. Open the Account: Contact a financial institution or brokerage firm to open a Spousal IRA account for the non-working spouse.
  4. Contribute Regularly: Make contributions to the account, considering your long-term retirement goals and risk tolerance.
  5. Monitor and Adjust: Periodically review your Spousal IRA's performance and adjust your investment strategy as needed.

Spousal IRAs offer a way for married couples to work together in securing their financial future. As you navigate your retirement investing options, consider incorporating a Spousal IRAs into your wealth-building strategy as a couple.


Read next