Non-Working Spouses and Roth IRAs

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For many married couples, retirement planning has become not only a personal responsibility but a financial necessity. Since Americans are living longer, retirement funding may need to span several decades beyond the normal retirement age. When you consider the escalating costs of health care, the uncertainty of Social Security and Medicare, and the pace of inflation, it is more important than ever to explore tax-advantaged saving options that can fit into you and your spouse’s overall financial plan for retirement. Let’s take a closer look at some of the benefits of a Roth Individual Retirement Account (IRA).

Roth IRA contributions are made on an after-tax basis from earned income only, and no income tax is due when distributions are taken. Distributions from a Roth IRA are free of income taxes after the account has existed for five years and you have reached age 59½. If you take withdrawals prior to age 59½, you may be subject to a 10% Federal income tax penalty. However, certain situations qualify as exceptions, such as early withdrawals for qualified education expenses or first-time homebuyer expenses.

In addition to tax-free withdrawals, a Roth IRA has two other important features: 1) There are no Internal Revenue Service (IRS) restrictions on when you must begin taking withdrawals (e.g., age 70½ with traditional IRAs), and 2) You can continue to contribute to a Roth beyond age 70½ if you have earned income. Over the long term, this can lead to the potential for additional savings, especially if you plan to work past age 70½, or if you have other sources of retirement income and do not expect to rely heavily on your Roth IRA.

Who Is Eligible?

While earned income is one of the requirements for opening up a Roth IRA, a married couple with only one income may open and contribute to a Roth IRA under certain guidelines.

The Roth IRA eligibility rule allows married couples to make contributions, as long as at least one spouse has taxable earned income from working and a joint tax return is filed. Under the IRS provision for married taxpayers filing jointly in 2019 with one earned income, and who have $12,000 in modified adjustable gross income (MAGI) or more, you and your non-working spouse can each contribute the maximum amount of $6,000, or $7,000 (if you are both age 50 or older and have at least $14,000 in MAGI) to a Roth IRA.

When a joint tax return is filed, the IRS regards a married couple’s income as joint income, even with a non-working spouse. A married couple’s total income is considered to equally belong to each spouse. Since both of you are joint recipients of the total income earned, you are both eligible to open a Roth IRA in your own names. You can each contribute up to the maximum contribution limit of $6,000 (or $7,000, if 50 or over) in 2019.

Income Limits

The Roth IRA income limits for a married couple filing a joint tax return with both spouses earning taxable income are the same for a married one-income couple filing jointly. The adjustable gross income (AGI) limit for maximum contributions is $193,000 or less for joint filers in 2019. If joint filers earn between $193,000 and $203,000, the allowed contribution amount is phased out per IRS guidelines.

The Roth IRA is a retirement savings vehicle that may offer multiple advantages for one-income married taxpayers, including tax-free distributions with no age restrictions. Be sure to consult your qualified financial and tax professionals to determine what is appropriate for your unique circumstances.


The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax, legal, or financial advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us or a solicitation of the purchase or sale of any securities. This newsletter is written and published by LIBERTY PUBLISHING, INC., BEVERLY, MA

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