Many households in the United States rely on a single income source while the other spouse stays at home, whether to care for children, manage household responsibilities, or due to other personal reasons. Although the nonworking spouse may not be earning a paycheck, it does not mean they have to miss out on valuable retirement savings opportunities. A Roth IRA for a nonworking spouse provides a unique and strategic way to secure retirement funds for both partners, even if only one of them earns income. This approach ensures that long-term financial planning is inclusive and stable, regardless of employment status.
Understanding the Roth IRA for a Nonworking Spouse
What Is a Roth IRA?
A Roth IRA (Individual Retirement Account) is a retirement savings account that allows contributions with after-tax dollars. The money grows tax-free, and qualified withdrawals during retirement are also tax-free. Unlike traditional IRAs, Roth IRAs do not require minimum distributions during the account holder’s lifetime, which makes them highly favorable for estate planning and long-term retirement flexibility.
Spousal IRA Basics
Even though Roth IRAs are typically reserved for individuals with earned income, the IRS allows what’s known as a spousal IRA for nonworking spouses. This means that a working spouse can contribute to a Roth IRA on behalf of their nonworking spouse, provided they file a joint tax return and meet certain income limits. The nonworking spouse does not need to have earned income themselves to receive a contribution.
Eligibility Requirements
Filing Jointly
To contribute to a Roth IRA for a nonworking spouse, the couple must file their taxes jointly. Filing separately will disqualify the nonworking spouse from being eligible for this contribution benefit. Joint filing confirms the household’s income as shared and enables contributions to both IRAs.
Income Limits
Roth IRA contributions are subject to income limits based on Modified Adjusted Gross Income (MAGI). For the tax year 2025, the phase-out range for married couples filing jointly is expected to begin around $230,000 and phase out completely at approximately $240,000. If your joint income falls below these thresholds, full contributions can be made to both the working and nonworking spouse’s Roth IRAs.
Contribution Limits
As of 2025, the contribution limit for Roth IRAs is $7,000 per person under age 50 and $8,000 for individuals 50 or older, thanks to the catch-up provision. This means a couple can potentially contribute up to $14,000 or more annually, even if only one spouse is earning.
Advantages of Roth IRA for a Nonworking Spouse
- Tax-Free Withdrawals: Contributions grow tax-free, and withdrawals in retirement are also tax-free, assuming age and duration requirements are met.
- Compounding Growth: Starting early even for a nonworking spouse provides a longer horizon for compound interest to accumulate.
- No Required Minimum Distributions: Unlike traditional IRAs, Roth IRAs are not subject to RMDs during the original owner’s lifetime.
- Estate Planning Tool: A Roth IRA can serve as a strategic tool for passing on wealth to heirs in a tax-efficient manner.
How to Open and Contribute to a Spousal Roth IRA
Choose a Custodian
Begin by selecting a reputable financial institution or brokerage firm that offers Roth IRAs. Most providers allow online account setup and offer access to a range of investment options like mutual funds, ETFs, and stocks. You can open the account in the name of the nonworking spouse, but the funding will be based on the working spouse’s earned income.
Contribute Consistently
To make the most of retirement savings, it’s wise to contribute regularly throughout the year. Monthly or quarterly contributions help smooth market fluctuations and make budgeting easier. Be sure to stay within annual contribution limits to avoid IRS penalties.
Track and Adjust Investments
Once funds are in the Roth IRA, they can be invested in a diversified portfolio. Regularly review the account’s performance and rebalance as necessary based on changing risk tolerance, market conditions, and retirement goals.
Investment Strategies for a Nonworking Spouse’s Roth IRA
Long-Term Focus
Since Roth IRA withdrawals must meet a five-year holding period and the account owner should be at least 59½ to avoid penalties, investments should be geared toward long-term growth. Index funds and ETFs are common low-cost options suitable for long-term investors.
Tailor Based on Retirement Timeline
The younger the nonworking spouse is when contributions begin, the more aggressive the investment approach can be. For spouses nearing retirement age, a more conservative strategy may be suitable to preserve capital and reduce risk exposure.
Diversification
Diversifying assets within the Roth IRA helps reduce risk. A well-rounded portfolio might include domestic and international equities, bonds, and possibly real estate investment trusts (REITs) depending on the investor’s goals.
Common Misconceptions
Only the Working Spouse Needs Retirement Savings
This is one of the most widespread misunderstandings. Both spouses, regardless of employment status, will need retirement income. A Roth IRA for the nonworking spouse helps ensure financial security for both individuals in later years.
You Can’t Contribute Without a Job
While normally true for Roth IRAs, spousal IRAs are the exception. The working spouse’s income can be used to make contributions on behalf of a nonworking spouse. This rule allows dual retirement saving even in a single-income household.
Roth IRAs Are Only for the Wealthy
Roth IRAs are available to a wide range of income levels and are particularly beneficial for people who expect to be in a higher tax bracket in retirement. They are not exclusive to wealthy investors and can be a smart option for middle-income families.
Maximizing Household Retirement Potential
Double the Contributions
One of the best aspects of utilizing a Roth IRA for a nonworking spouse is the ability to effectively double retirement contributions within a household. By making use of both spouses’ contribution limits, the couple can build a stronger financial cushion over time.
Catch-Up Contributions
For spouses aged 50 or older, catch-up contributions offer a valuable opportunity to accelerate retirement savings. This is especially useful for couples who started saving later in life or who need to make up for previous low contribution years.
Plan as a Team
Retirement planning is most effective when approached as a team effort. Reviewing contributions, investment strategies, and future income needs together helps align both spouses’ financial goals and ensures that no one is left behind.
A Roth IRA for a nonworking spouse is an often-overlooked strategy that can dramatically enhance a couple’s retirement readiness. By taking advantage of this option, households with a single income earner can still ensure that both partners benefit from long-term financial security and tax-advantaged growth. Filing jointly, adhering to income limits, and making consistent contributions are key steps in building a strong foundation for the future. This approach reinforces the idea that both partners, regardless of employment status, deserve an equal opportunity to prepare for retirement with confidence and peace of mind.