One of the more overlooked retirement planning moves for married couples is the spousal IRA.

And by “overlooked,” I mean a lot of people either have never heard of it or vaguely know it exists but treat it like the treadmill in the guest room: technically there, rarely used.

Here is the basic idea. If you are married filing jointly and one spouse is still working, the non-working spouse may still be able to contribute to an IRA, as long as the working spouse has enough earned income to cover both contributions. For 2025, that means up to $7,000 per spouse, or $8,000 per spouse if age 50 or older. Those 2025 contributions can generally still be made up until April 15, 2026.

For 2026, that limit increases to $7,500 per spouse, or $8,600 per spouse if age 50 or older.

That is a bigger deal than it sounds. It lets the non-working spouse keep building retirement savings in their own name instead of having all the retirement accumulation happen on one side of the balance sheet.

If both spouses are 50+, that is $16,000 that may be able to go into IRAs for 2025. If both contributions are deductible, that can create a meaningful tax break. In the 24% federal bracket, a $16,000 deduction saves about $3,840 in federal taxes. In the 32% bracket, it saves about $5,120. That is real money, not just “nice little write-off” money.

So when is it deductible?

If neither spouse is covered by a retirement plan at work, the contribution is generally fully deductible regardless of income. That is the cleanest version of this strategy.

But for many higher-income couples, that is not the case. One spouse is still working, may have a 401(k), and income may be too high to get the deduction. That is usually where people assume the strategy is dead.

Not so fast.

Even if the deduction is off the table, a spousal IRA can still be useful as part of a backdoor Roth strategy.

If your income is too high to make a direct Roth IRA contribution, you may still be able to make a non-deductible Traditional IRA contribution for your spouse and then convert that amount to a Roth IRA. That can be a very smart way for higher earners to keep getting money into the Roth bucket, where future qualified withdrawals can come out tax-free.

And the dollars can add up. If a couple both does this every year at age 50+, that is $16,000 per year moving into Roth accounts. Assuming a 7% annual return, doing that for 10 years would grow to roughly $221,000. Not bad for a strategy a lot of people do not even know exists.

This is also something my wife and I used in the past. These days, she has a part-time gig helping me with the bookkeeping for the business, so now she earns income and can participate in our Solo 401(k), which lets us potentially set aside even more. Probably fair, because even when I was the one who officially still worked, she was still my boss and definitely outworked me on several fronts over the nearly 30 years we have been together. If you want to learn more about that angle, check out our SEP IRA vs. Solo 401(k) blog. That strategy can be even more powerful for married business owners.

A couple caveats matter here

First, if a deductible IRA contribution is available, that may be the better first move than forcing a backdoor Roth. The right answer depends on your current tax bracket versus the one you expect later.

Second, you have to watch out for the pro-rata rule. If the spouse doing the conversion already has pre-tax money in a Traditional IRA, SEP IRA, or SIMPLE IRA, the conversion may be partly taxable. The IRS does not let you isolate just the after-tax dollars and ignore the rest.

Third, keep good records. Nondeductible IRA contributions and Roth conversions get reported on Form 8606. This is not the place for “I’m pretty sure we did that a few years ago.”

Bottom line

The spousal IRA is a simple planning move that can save taxes now, help the non-working spouse keep building retirement assets, and in the right situation become another backdoor Roth opportunity. For couples in their higher-earning years, it is absolutely worth looking at before the tax-filing deadline passes.