By Andy Ives, CFP®, AIF®
IRA Analyst
QUESTION:
I’m age 72 and my wife is age 63. I want to open a spousal Roth IRA. I already have a Roth for myself that I’ve owned for more than 5 years. Would she have to wait 5 years before she can make a withdrawal without a penalty, or does she have to have it for 5 years before she can withdraw anything?
Thank you,
Hass
ANSWER:
Hass,
If one spouse has little to no income but the other spouse does, the spouse with no income can make a traditional or Roth IRA contribution based on the income of the spouse who has eligible earnings (assuming they file a joint tax return). This is called a “spousal IRA” or a “spousal contribution.” This spousal IRA is fully owned by the spouse with no income, and all the normal rules apply as if she funded it with her own earnings. Since your wife is over 59½, there is never a penalty for withdrawing funds. But she will have her own 5-year clock to wait out for tax-free earnings.
QUESTION:
What options are available for a non-working spouse to contribute to a traditional/Roth IRA, provided that her significant other is employed and has earned income? Thank you.
Respectfully,
Richard
ANSWER:
Richard,
As mentioned in Question 1, both a traditional IRA and a Roth IRA are available for a non-working spouse, regardless of age. If the working spouse has enough compensation to cover both the spouse’s contribution and his own, then he can proceed to fund both of them. The couple must file a joint tax return, and once the funds are in the non-working spouse’s IRA, they are hers to do with as she pleases. All the normal IRA rules apply. If the working spouse is not “covered” by a retirement plan at work, then a spousal contribution to a traditional IRA can be deducted. If the working spouse is covered by a work plan, the phase-out range to deduct the non-working spouse’s traditional IRA contribution was $236,000 – $246,000 of the couple’s modified adjusted gross income (MAGI) for 2025 and is $242,000 – $252,000 of MAGI for 2026. The phase-out range for making a Roth IRA contribution for either spouse was $236,000 – $246,000 of MAGI for 2025 and is $242,000 – $252,000 of MAGI for 2026.
If you have technical questions you would like to have answered, be sure to submit them to [email protected], to be answered on an upcoming Slott Report Mailbag, published every Thursday.
https://irahelp.com/5-year-clocks-and-ira-options-todays-slott-report-mailbag/