Can I Contribute to My Wife's Roth IRA if She Doesn't Work?

by A. Low

If your wife's Roth IRA has been sitting untouched during her unemployment, that doesn't mean it has to stay that way. If you meet the income requirements, you can make contributions in lieu of your wife as long as you need to. Although your name won't be on her account, and only she can make withdrawals from it, paying into both your own and your wife's Roth IRA is a smart way to boost your retirement savings as a couple.

Your Wife's Roth IRA

If you are married filing jointly, you may contribute to your wife's Roth IRA as long as you fall under the income cap for the tax year. However, you cannot share a joint IRA with anyone. If you and your wife both wish to have a Roth IRA, you will need to each open one in your own name. Then, you may contribute up to $5,000 in both her account and your own every year.

Rules For Contributing

Because your contribution to your wife's IRA will be based on your income, you must have enough taxable compensation to fund your contribution to her account. If you want to contribute the maximum amount to her account, this means your taxable compensation, as of 2011, must be at least $5,000, or $6,000 if you are over 50. However, there is a cap to how much you can earn and still contribute to a Roth IRA. As of 2011, you must earn no more than $167,000 if you are married filing jointly or $105,000 if you are married filing separately.

Benefits of Contributing to a Roth IRA

Having your own Roth IRA is a good start to socking away some retirement savings, but actively contributing to your spouse's account too will help you both significantly in retirement -- potentially doubling your retirement savings. You can withdraw money from your Roth IRA at any age without paying a penalty, and you may continue contributing to your Roth IRA as long as you like, whereas other IRAs require you to withdraw at a certain age.

Roth IRAs and Taxes

While a traditional IRA provides you tax deductions on your contributions, it has this downfall: you must pay income taxes when you withdraw from it in retirement. A Roth IRA works the other way around. Although there isn't a tax benefit for contributing money to your Roth IRA now, you won't have to pay any taxes on your future withdrawals. The Roth IRA is also ideal if you think you and your wife will be in a higher tax bracket when you retire, because you won't have to wind up paying those steep percentages associated with wealth when you retire.