WHAT YOU SHOULD KNOW ABOUT SPOUSAL IRAS

You typically need earned income to contribute to an individual retirement account, but a spousal IRA provides an important exception to this rule.

- EMMA PATCH

Millions of spouses leave the workforce every year to care for children or elderly parents, a move that can jeopardize retirement security. But if one partner is working, a spousal IRA can help close the gap.

As long as one spouse has earned income and the couple files a joint tax return, the working spouse can contribute to an IRA in the nonworking spouse’s name. That makes a spousal IRA an ideal retirement-savings tool for spouses who plan to take a pause from their careers, says Madison Sharick, a certified financial planner in Pittsburgh.