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A Roth IRA is a kind of individual retirement account (IRA) that allows for tax-advantaged retirement savings. If you’re married, you may be wondering whether you can open a joint Roth IRA with your spouse. The short answer is no: Roth IRAs can only be owned by a single individual. However, you may consider opening a spousal IRA, whether traditional or Roth, for a nonworking spouse who wants to save for retirement.
Key Takeaways
- A Roth IRA is designed to allow a single person to save on a tax-advantaged basis.
- Married couples can open individual Roth IRAs or—if one spouse does not have earned income—a spousal IRA, either Roth or traditional.
- Roth IRAs can be an attractive retirement savings option for people who want to be able to take tax-free distributions.
- It’s important to be aware of annual contribution limits for Roth IRAs as well as income thresholds that determine who can make contributions.
What Is a Roth IRA?
A Roth IRA enjoys tax-advantaged status under the Internal Revenue Code. Individuals can open and contribute to a Roth IRA in addition to a workplace retirement plan, such as a 401(k), or in place of these plans if they don’t have access to a retirement account at their job.
Here are the main characteristics of a Roth IRA:
- Contributions are not tax deductible.
- Qualified distributions are tax free.
- There are no required minimum distributions (RMDs).
- Annual contribution limits apply.
The Internal Revenue Service (IRS) determines how much you can save in a Roth IRA each year. For 2022 the annual contribution limit is $6,000. An additional $1,000 catch-up contribution is allowed for those 50 and older.
The IRS restricts who can contribute to a Roth IRA. These accounts are designed to be owned by a single person, so you cannot establish a joint Roth IRA with your spouse. Your ability to make the full contribution to each account is based on your modified adjusted gross income (MAGI) and filing status. Here are the income thresholds for 2022.
| Roth IRA Contribution Limits 2022 | ||
|---|---|---|
| Filing Status | Modified AGI | Allowable Contribution |
| Married filing jointly or qualifying widow(er) | Less than $204,000 | Up to the limit |
| Married filing jointly or qualifying widow(er) | At least $204,000 but less than $214,000 | A reduced amount |
| Married filing jointly or qualifying widow(er) | $214,000 or higher | Zero |
| Married filing separately and you lived with your spouse at any time during the year | Less than $10,000 | A reduced amount |
| Married filing separately and you lived with your spouse at any time during the year | $10,000 or higher | Zero |
| Single, head of household, or married filing separately and you did not live with your spouse at any time during the year | Less than $129,000 | Up to the limit |
| Single, head of household, or married filing separately and you did not live with your spouse at any time during the year | At least $129,000 but less than $144,000 | A reduced amount |
| Single, head of household, or married filing separately and you did not live with your spouse at any time during the year | $144,000 or higher | Zero |
Source: Internal Revenue Service
The annual contribution limit for Roth IRAs is the same as the limit for traditional IRAs.
Opening a Roth IRA With a Spouse
Because IRS rules do not allow you to open a Roth IRA jointly with a spouse, you would each have to open your own Roth IRA to take advantage of the tax benefits. To open the account, at least one spouse is required to have earned income. If one spouse has a paid job but the other doesn't, the income-earning spouse can open a spousal IRA for the non-earning spouse instead.
The spouse who has earned income for the year funds the spousal IRA, but the non-earning spouse owns it. The working spouse can also have their own separate IRA. These can be Roth or traditional accounts.
There are some rules for spousal IRAs:
- At least one spouse must have taxable earned income for the year.
- The working spouse’s income must be at least the amount contributed to both IRAs.
- Married couples must file a joint tax return.
- Total contributions cannot exceed the annual IRA contribution limit.
If the spousal IRA is a Roth IRA, then it must also meet the income requirements in order for contributions to be allowed. Assuming that condition is met, it’s possible for married couples to contribute up to $12,000 to IRAs for 2022 or $14,000 if they’re both 50 or older.
Traditional IRAs allow for tax-deductible contributions; Roth IRAs do not.
Opening a Spousal IRA
Opening a spousal IRA isn’t that different from opening any other type of IRA. First you need to choose a brokerage or other IRA custodian, which can be the same place where you currently have an IRA if you wish.
Once you choose an IRA custodian, you can move through the account-opening process. This involves:
- Selecting the spousal IRA option
- Providing the requested information (i.e. your spouse’s name, date of birth, Social Security number, etc.)
- Linking an external bank account for funding
You must decide whether you want to make the maximum allowed contribution for the year or set up ongoing monthly automatic contributions. You and your spouse also must decide which investments to hold in the account. Brokerages typically offer a range of mutual fund options, including exchange-traded funds (ETFs) and index funds.
When choosing investments, pay attention to the associated expense ratios and other fees.
Couples who establish a spousal IRA may be able to claim the retirement saver’s credit for additional tax savings. The amount of the credit is either 50%, 20%, or 10% of the contributions you make to a traditional or Roth IRA. For 2022 married couples filing jointly can claim the maximum credit if their adjusted gross income (AGI) is not more than $41,000. The credit phases out once AGI reaches $68,000.
Can I Open a Roth IRA With My Spouse?
No. IRAs are meant to be owned by a single individual only. A joint Roth IRA is not an option, but married couples who file a joint tax return can open spousal IRAs.
What Is a Spousal IRA?
A spousal IRA is an IRA that’s opened by one spouse on behalf of the other. The spouse who has taxable income for the year makes the contributions, but the non-earning spouse is the IRA owner.
How Much Can I Contribute to an IRA?
For 2022 the maximum annual contribution limit for traditional and Roth IRAs is $6,000. An additional catch-up contribution of $1,000 is allowed for savers age 50 and older. Your ability to make the full contribution to a Roth IRA depends on your filing status and MAGI.
The Bottom Line
While no one can open a Roth IRA jointly with their spouse, they can still help their spouse save for retirement. A spousal IRA allows couples an additional tax-advantaged way to reach their retirement savings goals together. To maximize retirement savings, the income-earning spouse can coordinate contributions to a spousal IRA with contributions to their own IRA or employer-sponsored plan. They can also establish a joint taxable brokerage account with their spouse if they'd like to invest in stocks, mutual funds, bonds, and other securities together.
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