Tax break for retirement savers often missed by couples: advisor warns of thousands lost

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Married couples with a single wage earner still have a narrow window to increase tax-advantaged retirement savings for 2025: contributions to a spousal IRA can be made through the tax-filing deadline on April 15. That choice can both raise household retirement balances and change the mix of taxable and tax-free income in retirement.

A spousal IRA lets a non-working or low-earning spouse hold an individual retirement account — either a traditional IRA or a Roth — based on the working partner’s earned income. As long as the earning spouse generates enough compensation, the couple can treat the non-earning partner as eligible to contribute.

What this means for households now

For couples who missed savings opportunities during the year, a spousal IRA is a practical way to expand retirement contributions before the deadline. Contributions made by April 15 for the 2025 tax year still count for that year.

Financial planners note this is regularly underused. “Many households don’t realize a spouse without paychecks can still sock money away in an IRA,” said Randy Bruns, a certified financial planner in Naperville, Illinois. Increased participation can materially raise a household’s long-term retirement nest egg.

Tax Year	Regular IRA Limit	Catch-up (age 50+)
2025	$7,000	$1,000
2026	$7,500	$1,100

Why couples should consider a spousal IRA

Key benefits include:

Higher household savings — Two IRAs instead of one increases total annual contributions that enjoy tax-advantaged growth.

Potential tax deductions — Traditional IRA contributions may be deductible depending on income and whether the working spouse has an employer retirement plan.

Tax diversification — Putting some contributions into a Roth IRA can produce tax-free withdrawals later, balancing pre-tax and after-tax sources in retirement.

Coverage for career interruptions — A spousal IRA helps maintain retirement savings when one partner temporarily leaves the labor force.

“Using a spousal IRA can be a straightforward way to diversify the tax treatment of future retirement cash flow,” said Christopher Giambrone, a CFP based in New Hartford, New York. He recommends couples weigh Roth versus traditional accounts based on current tax rates and expected future income.

Otto Rivera, a CFP near Orlando, adds that the option is especially useful for families where one partner paused their career for caregiving or education. “It preserves a path to steady retirement accumulation even during gaps in employment,” he said.

Context: how common are IRAs and who contributes?

IRA ownership has grown: an April 2025 report from the Investment Company Institute found roughly 57.9 million U.S. households reported owning an IRA as of mid-2024. Yet contribution activity trails ownership — only about 37% of households with IRAs were adding to them at that time, the ICI data showed.

Rollovers from employer plans, like 401(k)s, have been a major driver of traditional IRA growth. At the same time, average IRA balances are rising: Fidelity reported an average balance of $137,095 across 18.9 million IRAs as of Dec. 31, 2025, a roughly 7% increase year over year.

Practical next steps before the deadline

If you’re considering a spousal IRA for 2025 contributions, confirm the working spouse’s earned income is sufficient to cover both partners’ contributions and choose whether a traditional or Roth account better fits your tax outlook.

Open or fund the IRA before the April 15 filing deadline and keep records for tax reporting. If you’re unsure which option is best, consult a tax professional or financial planner to evaluate income limits, deduction rules and long-term tax consequences.