IRAs

Making Roth IRA Contributions in Retirement

Without earned income, you can't contribute to a Roth IRA – but a working spouse still can.

My wife is retired and has a pension. Can she still contribute to her Roth IRA? She doesn’t work at all anymore. I work part-time, earning about $22,000 per year, and have my own Roth IRA.

Without earned income, your wife is not eligible to contribute to a Roth IRA herself (unearned income, from pensions, investments or Social Security, doesn’t count toward eligibility). But because you’re still working, you can contribute to your wife’s IRA on her behalf. That is a good way to boost savings if one spouse has no earnings -- say, because he or she is retired, staying home with the kids, taking time off or unemployed.

You can contribute up to $5,000 to your own Roth IRA (up to $6,000 if you’re 50 or older during the year) and up to $5,000 for your wife (or $6,000 if she’s 50 or older), as long as you earned at least as much for the year as the combined contributions. You have until April 17, 2012, to contribute to any Roth IRA for 2011.

To make Roth contributions to either account, the adjusted gross income on your joint tax return must be less than $179,000 for 2011 (the contribution amount starts to phase out if you earned more than $169,000). The income eligibility limit rises to $183,000 in 2012 (with the amount starting to phase out above $173,000).

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