Can I Combine My IRA With My Wife's IRA?

If you are like many couples, you and your wife have joint bank accounts and joint investment accounts, you pay taxes together, and you spend your money together. There are very few things in your financial life you can't combine, but an IRA is indeed one of those things. IRA stands for "individual retirement arrangement," and the IRS requires that it stay individual. Many of the rules for IRAs are spouse-dependent, however, so here's a rundown.

Both Roth and traditional IRAs have annual contribution limits that restrict the amount of money you can save each year. For example, someone under 50 can contribute up to ​$6,000​ in 2021, while someone 50 or older can contribute as much as ​$7,000​. However, the contribution amount can't exceed your annual taxable income, so if you don't work much, you might have a lower annual contribution limit.

You can't combine Roth IRA accounts with a spouse. Further, as a married person, you cannot contribute at all to a Roth IRA if your combined adjusted gross income (AGI) is greater than a particular value, ​$208,000​ as of 2021. The IRS also phases Roth contribution limits down as your combined AGI reaches certain levels. As of 2021, couples with an AGI of greater than ​$198,000​ have reduced limits.

While the IRS doesn't prohibit traditional IRA contributions in the same way, you may not be able to deduct those contributions from your taxes if you or your spouse has access to an employer-sponsored retirement plan. If neither you nor your spouse is covered by a retirement plan, you can deduct the full contribution limit.

If one partner is covered and the other is not, the covered partner faces a phaseout to zero when the AGI is between ​$105,000 and $125,000,​ while the uncovered partner faces a phaseout at AGI levels between ​$198,000 and $208,000​ If both partners have employer-sponsored plans, the phaseout range drops to ​$105,000 and $125,000​ for both partners.

Typically, the IRS requires IRA participants to have compensation – earned income from a job – in order to make contributions. However, if you are married and file taxes jointly, the IRS looks at all compensation as belonging to both partners. Therefore, both spouses can contribute to IRAs even if only one spouse has income.

Total compensation must exceed the value of all IRA contributions, and the working partner's IRA contributions are subtracted first. This means that if you only have ​$6,000​ in compensation and the working spouse makes a full ​$6,000​ IRA contribution, you cannot contribute to the non-working spouse's IRA. You can split the difference by depositing part of that ​$6,000​ to one account and the remaining part to the other account.

It's also important to note that while you cannot have joint accounts while you are alive, a surviving spouse can treat her deceased spouse's IRA as her own. If the surviving spouse is listed as a beneficiary on the account, she can take the inherited portion of the deceased's IRA and combine it with her own funds as if they were always one account.