Many families assume that retirement savings are tied strictly to individual paychecks. If you step away from the workforce, whether to raise children, care for a loved one, or manage a household, it can feel like your ability to save for retirement disappears along with your W‑2.
Fortunately, that’s not always the case. For married couples who file jointly, the IRS offers a powerful and often misunderstood opportunity that allows a non-working spouse to build retirement savings using their partner’s earned income. Understanding how this works can open the door to meaningful long-term growth, tax advantages, and important asset protection later in life.
You may be able to contribute to an IRA based on your spouse’s income if you file a joint return. The IRAs can be funded each year for either spouse or both up to the income amount. So, if you are still working but your spouse is not, you can fund an existing IRA for them or open a new account if they don’t already have an IRA. Earned income is generally defined as taxable compensation such as wages from a job or self-employment income from a business.
2026 Contribution Limits and Guidelines
For tax year 2026, $ 7,500 can be contributed to an IRA (a $1,100 catch up contribution is also available for individuals 50 or over for a total of $8,600). The non-working spouse’s IRA can be fully funded each year as long as there is at least $15,000 of earned income ($17,200 if 50 or over). While there are rules restricting tax deductions for IRA contributions based on total income, there are no maximum income restrictions for non-deductible contributions. This can allow the retirement savings to grow twice as fast—a great wealth building technique!
Roth IRA Income Thresholds
A Roth IRA can be funded in the same manner but there are income limits with Roth IRAs.
- Married Filing Jointly: A couple with more than $242,000 of modified adjusted gross income (MAGI) in 2026 enter a phase out range and at $252,000 the Roth IRA becomes unavailable.
- Single Filers: The phase-out range is a MAGI of $153,000–168,000.
Asset Protection and Medicaid Planning
It is important to have retirement accounts in both spouse’s names when feasible in retirement for asset protection later in life. If one spouse becomes ill, generally they are required to spend their own assets before qualifying for Medicaid or government assistance.
In Pennsylvania, if the healthy spouse has their own IRA, these assets are protected and don’t have to be spent down for the sick spouse’s medical expenses. An individual may not have worked outside the home in their lifetime but can still have retirement assets in their name which can be their saving grace if their spouse needs care!
Bringing It All Together
Not earning a paycheck doesn’t mean stepping out of the retirement planning picture. For married couples who file jointly, spousal IRA contributions offer a legitimate, powerful way to continue building long-term financial security, while also improving tax efficiency and protecting assets later in life.
Whether the goal is to catch up on retirement savings, create balance between spouses’ accounts, or plan proactively for healthcare and legacy considerations, this strategy can play an important role in a well-designed financial plan. The rules and income thresholds matter, and the right choice between Traditional and Roth contributions depends heavily on your broader tax situation.
It’s also helpful to remember that retirement contributions can typically be made up until the April tax filing deadline. In some cases, waiting until final income numbers, such as a W‑2, are available can provide added clarity before making a contribution. Reviewing these decisions with a trusted financial adviser can help ensure you’re choosing the right account type and timing your contributions in a way that best supports your long-term retirement strategy.
This article was originally published on February 09, 2021, and was updated for accuracy and relevance on the date above.
