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What is a spousal individual retirement account (IRA)?

Posted by Andrew Chan  August 19, 2009 02:00 PM

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A spousal IRA is a traditional IRA or Roth IRA that a working spouse can establish and make contributions to for his or her spouse. It is usually set up in situations where one spouse earns the majority of or all of a couple’s income. (For purposes of this discussion, I’ll refer to the spouse who has little or no taxable income as the “non-working spouse” even if he or she does have an income.) Keep in mind that a “spousal IRA” is not a special type of IRA. The term “spousal IRA” is just a description of the way contributions are made to a non-working spouse’s IRA.

In order to make contributions to a non-working spouse’s IRA, the working and non-working spouse needs to satisfy the following criteria:
• They need to be married as of the end of the tax year;
• They need to file a joint federal income tax return for the tax year in which the contribution is being made;
• The working spouse must have taxable compensation for the year in which the contribution is being made; and
• If the “non-working” spouse has taxable income, it must be less than the income earned by the “working” spouse.

For a Roth IRA, the couple also needs to have a Modified Adjusted Gross Income (MAGI) of less than $176,000 (in 2009) to be eligible to contribute to a Roth.

If you satisfy the criteria above, you may be able to contribute as much as $5,000 dollars (in 2009) to your non-working spouse’s IRA. If your non-working spouse is age 50 or older, the contribution can be as much as $6,000 dollars (in 2009). The actual amount that you can contribute to your non-working spouse’s IRA will depend on: (1) your joint MAGI; (2) whether or not the working spouse contributes to his or her own IRA; and (3) the age of the non-working spouse.

Tax Deductible Contributions
The determination of whether or not an IRA contribution is tax deductible is the same whether or not you contribute to your own IRA or you contribute to your non-working spouse’s IRA. In general, deductibility is based on the following factors: tax filing status, MAGI, the amount contributed, and participation in an employer sponsored retirement plan. Deductibility only applies to IRA contributions and not Roth IRA contributions. Roth IRA contributions are never deductible.

The IRS has prepared a couple of useful tables to help guide you through the process of determining how much of your IRA contribution is deductible (,,id=188232,00.html).

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Local finance professionals share insights and advice on issues such as budgeting, managing debt, and retirement planning.

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D. Abraham Ringer is a CERTIFIED FINANCIAL PLANNER practitioner and a Financial Adviser with Morgan Stanley Global Wealth Management in Boston. He is registered in MA, NH, NY and several other states to which his articles are directed. For more information please visit
Financial Planning Association™ of Massachusetts has 900 members who specialize in the financial planning process. Many of its members engage in philanthropic pro bono work in their communities, recommend legislation, elevate public awareness, promote financial literacy, and advocate for sound economic and tax policies.
Odysseas Papadimitriou is the founder of, a credit card and gift card marketplace, and, a personal finance site. He has more than 13 years of experience in the personal finance industry, and previously served as senior director at Capital One.

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