Can You Contribute to a Roth IRA for Your Spouse?

A Roth IRA, previously known as an IRA Plus, is an individual retirement plan that was designed for people who make too much money to make tax-deductible contributions to a traditional IRA account. As long as one spouse is employed or receives alimony income, she may make contributions for the other spouse as well as in a spousal IRA. This type of account provides a way for families with a stay-at-home spouse, or one spouse who has retired while the other still works, to increase retirement savings.

You must be married and file a joint income tax return in order to be eligible to contribute to a spousal IRA. There are no age requirements for contributing to a Roth IRA, as long as one spouse earns income. The amount of income must be equal to or greater than the amount of the Roth IRA contributions made for the year and affects whether you can make a partial or full contribution to the account. There may be a minimum contribution, depending on where you invest, and you must also meet the contribution deadline for each fiscal year -- April 15th, the day your income taxes are due. Alimony income also qualifies you to contribute to a Roth IRA.

For the tax year 2009, the maximum annual contribution to a Roth IRA is $5,000 for those under age 50. This means you can contribute $5,000 to your own account and $5,000 to a spousal account for the non-working spouse. For those over the age of 50, the annual limit is $6,000, and this age group may make additional catch-up contributions for years in which they did not contribute the maximum amount. Remember, the working spouse must earn as much or more than the total amount contributed to both accounts combined. These limits have risen dramatically in the past several years and could increase in future years depending upon inflation. Married couples filing joint income taxes must have a modified adjusted gross income of less than $166,000 for the 2009 tax year to be eligible to make a full contribution, or $166,001 to $176,000 to make a partial contribution.

Only contribute to a Roth IRA if you are not eligible for a retirement plan at your workplace. Business-based plans like the 401(k) offer an immediate tax deduction, whereas Roth IRA contributions are not tax-deductible. Withdrawals and growth are, but not contributions. Even contributions to a traditional IRA are deductible, so contact your financial adviser to make sure that a Roth IRA is the best option for you and your spouse and that you have exhausted any possibilities that might offer you more benefits in your individual situation.

A Roth IRA offers three significant benefits that should be taken into consideration. 1. This type of account offers tax-free growth and withdrawal. You won't pay taxes when you withdraw money during retirement. This is a particularly attractive benefit if you expect to be in a high tax bracket in retirement. 2. Your investment compounds as you continually reinvest return. The earlier you invest, the longer your money has to grow. 3. You can make contributions to a Roth IRA at any age. Some retirement plans cut off the age at which you can keep contributing, but a Roth IRA allows you to invest over many years with no cut-off age.