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Setup Roth IRA for spouse already retired?
Old 11-03-2013, 08:44 AM   #1
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Setup Roth IRA for spouse already retired?

Is it possible to setup a Roth IRA for a spouse that's already retired? I am still working, and I've setup one for myself this year. The reason for setting up a Roth IRA for DW is it would help to keep us in the 15% tax bracket if some of the money in her traditional IRA could be converted to a Roth IRA in a couple of years - and I keep reading about the 5 year rule for Roth IRA withdrawals after age 60 (she is 55 now).
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Old 11-03-2013, 09:03 AM   #2
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Originally Posted by Al18 View Post
Is it possible to setup a Roth IRA for a spouse that's already retired? I am still working, and I've setup one for myself this year. The reason for setting up a Roth IRA for DW is it would help to keep us in the 15% tax bracket if some of the money in her traditional IRA could be converted to a Roth IRA in a couple of years - and I keep reading about the 5 year rule for Roth IRA withdrawals after age 60 (she is 55 now).
Yes is the answer to the setup question. Google "Spousal Roth IRA" and you'll find articles and links like this one.
Boost retirement savings through a spousal IRA - MarketWatch

(I didn't try "Kay Bailey Hutchison IRA". Who knew?)
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Old 11-03-2013, 10:32 AM   #3
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The spousal IRA is a good thing to do if you are still working and have the funds to fund the IRA contributions. If you weren't working, you could not fund the
Roth IRA with contributions, but you could still open one and fund it w/ conversion contributions from your TIRA........there would be no limit on this except those imposed by yourself for tax considerations and the funds in your tax-deferred accounts.
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Old 11-03-2013, 11:48 AM   #4
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Yes, you can contribute to a Roth IRA for your wife, even if she is retired, as long as you have enough earned income to fund it or are converting it from a tIRA as kaneohe pointed out.

I'm still young, in my 20's, and my wife is enjoying her early retirement immensely while staying home and taking care of our son, though we're both still dependent on my income. My Roth IRA is fully funded and as soon as my salary increases, we'll be opening up one for my wife as well.

The only difference between my wife and yours is age, but for some reason people perceive anyone under ~55 y/o as "unemployed" and those older and not working as "retired". However, in terms of IRA rules, it makes no difference what the employment status of the account holder is, as long as you have an eligible way to fund it.
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Old 11-03-2013, 02:09 PM   #5
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The only difference between my wife and yours is age, but for some reason people perceive anyone under ~55 y/o as "unemployed" and those older and not working as "retired". However, in terms of IRA rules, it makes no difference what the employment status of the account holder is, as long as you have an eligible way to fund it.
Yeah. I'm 48 and I call myself "semi-retired" or "on sabbatical" for now. It's easier than fielding all the comments about being way too young to retire and I need to do something so I don't rot.
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Old 11-03-2013, 03:35 PM   #6
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OK, thanks for the great advice.
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Old 12-16-2013, 09:45 AM   #7
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Also, you may qualify for the "savers tax credit" if you fall below $35k-ish. You can get 50% credit on up to $2000 for you and your spouse. My mom and husband will both do this and get $2k back on taxes for opening a $2k Roth for both of them.
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