What is the primary purpose of a Spousal IRA?

The primary purpose of a Spousal IRA is to facilitate contributions on behalf of a non-working spouse. This type of Individual Retirement Account allows a working spouse to contribute funds to an IRA in the name of their non-working spouse, enabling the non-working spouse to benefit from retirement savings even if they do not have any earned income of their own. This is particularly beneficial in situations where one partner may stay home to manage family responsibilities, as it ensures that both partners have the opportunity to save for retirement.

A Spousal IRA effectively increases the retirement savings potential for households by allowing the working spouse to contribute for both themselves and their non-working spouse, often maximizing the couple's overall retirement savings. This provision helps level the playing field in retirement planning, as it recognizes the economic contributions of non-working spouses, even if they are not earning an income.

The other choices do not reflect the main function of a Spousal IRA. Contributions for a working spouse are not the intent, nor is it designed primarily for tax-free withdrawals or geared toward self-employed individuals. The focus is on providing a means for a non-working spouse to save for retirement, which is why option B accurately captures the essence of the purpose behind a Spousal IRA.