In many couples, there is one spouse that might not be working at a w2 job or being self-employed. The “non working” spouse is usually managing the household ensuring it runs smoothly, which can be a 24/7 job especially if there are children. In many of these cases, the “non working” spouse is supporting cost-saving initiatives (i.e. private daycare, nanny expenses, etc.) and managing family activities (i.e. doctor’s visits, getting home supplies, etc.).

As the “non working” spouse does not have earned income, how do we ensure that he or she can enjoy an adequate retirement?

  1. Spousal IRA (Traditional or Roth) – If the working spouse has earned income, the non working spouse can contribute to the spousal IRA within the allowable income thresholds and no more than your taxable compensation (i.e. In 2025, married couples can contribute if MAGI under $236,000. Then, partially until $246,00. After that dollar threshold, the couple is not eligible).
  2. Retirement age and working spouse dies – The federal law generally requires that the surviving spouse gets a partial pension after the participant’s death. This is called a pension paid as a qualified joint and survivor annuity. In general terms, the partial pension is around 50% of the participants. In some cases, you should consider additional life insurance or other financial tools to ensure that the funds are enough for the surviving spouse.
  3. Divorce – As part of the final divorce documents, there should be a qualified domestic relations order (QDRO) that allows a non-working spouse to claim a portion of the working spouse retirement benefits. This document just splits any working spouse retirement funds and will be considered as personal retirement funds for each spouse per the order.
  4. Change to working spouse – The non working spouse might return to work part-time or full time in different scenarios, such as after children start going to school or leave the household. At that point, more options are available as a w2 employee (retirement options from employer) or self-employed individual.

Note that each case might have different recommendations, but there are options for the “non working” spouse to have peace of mind regarding retirement. If you have questions on this subject, please, reach out to our professionals for a consultation.

Link IRS (Section Spousal IRAs) – Retirement topics – IRA contribution limits

Link IRS – Retirement topics — QDRO: Qualified domestic relations order