A Spousal IRA is a type of Individual Retirement Account (IRA) that is designed for a married couple where one spouse earns income and the other does not. This allows the non-working or lower-earning spouse to contribute to an IRA, even without personal earned income, providing an opportunity to save for retirement.

There are two types of Spousal IRAs: Traditional and Roth.

Traditional Spousal IRA: Contributions may be tax-deductible depending on your income and whether you or your spouse are covered by a retirement plan at work. Earnings can potentially grow tax-deferred until you need to take distributions, which are then taxed as ordinary income.
Roth Spousal IRA: Contributions are made with after-tax dollars, meaning there’s no upfront tax deduction. However, earnings and qualified withdrawals in retirement are generally tax-free.

The contribution limit is the same as for other IRAs: $6,000 per year, or $7,000 per year if you’re age 50 or older. However, the actual amount you can contribute may be less, based on your income and tax filing status. Always check the current rules with the IRS or a financial advisor.

Remember, the working spouse must have enough earned income to cover both their own and the spousal IRA contributions. Also, you must be married and file a joint tax return to be eligible for a Spousal IRA.