Many married couples share almost everything: checking accounts, houses and personal property. Knowing your options for retirement savings as a married couple helps you ensure that you set aside enough money for retirement . It also helps prevent your Roth IRA from accidentally losing its tax-advantaged status.
One Person, One Account
Married couples may share many things, but Roth IRAs are not among them. The IRS requires that each person maintain his own Roth IRA. Not even marriage allows two people to open a joint Roth IRA account. If you attempt to combine the money in your Roth IRA with the Roth IRA of your spouse, the account is disqualified from being a Roth IRA.
For each spouse to contribute to a Roth, the couple must have a modified adjusted gross income of less than the annual limit.
Two People, Double the Total Contributions
When you are married, even though you cannot have a joint Roth IRA, you can each contribute up to the annual limit to your own Roth IRAs. This allows a couple to set aside twice as much per year as they otherwise would have been able to save individually. For example, in 2011 the annual contribution limit is $5,000 if you are younger than 50, and $6,000 if you are 50 or older. If both spouses are at least 50, each can contribute $6,000 to a Roth IRA, for a combined total of $12,000.
Spousal Roth IRA Contributions
If one spouse remains at home or does not otherwise have enough income to qualify to make a full contribution to her Roth IRA, the other spouse contribute to her IRA on her behalf. To qualify, the couple must file a joint tax return, and the total compensation for the contributing spouse must exceed the total contributions to both Roth IRAs. For example, if both spouses were 50 or older in 2011, the working spouse would need at least $12,000 in compensation to make a full contribution to both spouses' Roth IRAs for the year.
Though you and your spouse cannot share a Roth IRA, or any other type of IRA, you can list each other as beneficiaries on the account so that the surviving spouse will inherit the deceased spouse's Roth. When a spouse inherits a Roth IRA, that spouse has the option of treating the Roth IRA as his own rather than having to distribute it as an inherited IRA. In doing so, the surviving spouse may combine the deceased spouse's IRA with his own rather than keeping two separate accounts.
- Internal Revenue Service: Publication 590
- Fairmark: Spousal Roth IRA; Kaye A. Thomas; 2008
- IRS. "Traditional and Roth IRAs." Accessed March 26, 2020.
- EBRI. "Issue Brief: August 13, 3018; No. 456." Page 8. Accessed March 26, 2020.
- IRS.gov. "Income ranges for determining IRA eligibility change for 2021." Accessed Nov. 01, 2020.
Based in the Kansas City area, Mike specializes in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."