10. Certain IRA Contributions for a Working Spouse

Many people believe that once you retire, you can no longer contribute to an IRA. That is generally true, as you need earned income to make contributions. However, there is an important exception for married couples where one spouse is still working.

The Spousal IRA Rule

If you are retired but your spouse is still working and earning income, your working spouse may be able to contribute to an IRA on your behalf. This is called a spousal IRA contribution.

To be eligible, you must file a joint tax return, and the working spouse must have enough earned income to cover both their own IRA contribution and yours. As of 2024, the maximum IRA contribution is $7,000 for those under 50, and $8,000 for those age 50 and older (thanks to the $1,000 catch-up contribution). So, if both spouses are over 50, the working spouse would need at least $16,000 in earned income to max out contributions for both people.

This allows the couple to continue saving for retirement in a tax-advantaged account, even though one spouse is no longer working. The contribution made to the non-working spouse’s traditional IRA can be a valuable tax deduction, reducing the couple’s overall taxable income for the year.