March 2022 Question Of The Month

By Admin Prepare

March 18, 2022

“Hello. I am currently working; however, my spouse is not. I have heard of spousal IRA contributions. Exactly what are these, and what are the rules or options for making a spousal IRA contribution? Thank you.” Andrea

Over the last couple of years, there have been a lot of changes in the workforce, mainly due to the pandemic. In many households, one spouse may not work, may be between jobs, or may be retired. In these scenarios where one spouse is working and the other is not, there is still a way for both spouses to continue to save for retirement.

Many people think in order to contribute to an IRA, you must have earned income. That is true, however, because of the rules in a spousal IRA, earned income can count for both spouses. So, if you are otherwise eligible and have enough earned income, both spouses can contribute up to the maximum amount allowed to their own individual IRA. Thus, spousal IRA contributions can be a valuable tool if you are out of the workforce and are concerned about the impact this may have on your retirement savings.

To make a spousal contribution for the year, you must be legally married on December 31st of that year. If you are divorced or legally separated as of that date, you are not eligible even if you may have been married earlier in the year. You must also file a joint federal income tax return for the year.

To do a spousal contribution, you make a contribution to your IRA based on your spouse’s compensation. Your spouse can still contribute to an IRA as well, as long as he or she has enough earned income or taxable compensation to fund both contributions. You may make spousal IRA contributions in some years and regular IRA contributions in others.

Spousal contributions are one of the many ways to help maximize your retirement plan. To learn more about this and get your retirement planning questions answered, as well as to gain valuable information and education on all areas of retirement planning, visit the Prepare Institute website ( and find a retirement course or class near you.

Content is for educational and informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. You should contact your retirement and tax professional before utilizing any of the information in this article.