Can this husband and wife both save in Roth IRAs?


Q. The husband is 62 and semi-retired with earned income of $10,000. The wife 55 and a homemaker with no earned income. To be equitable, both want to contribute the same amount to their respective Roth IRAs. What is the maximum that each may contribute?
— Savers

A. You’re correct to believe there are maximums.

It’s based on your income for the year.

In 2020, the maximum allowable contribution to an IRA is $6,000 or the amount of your earned taxable compensation if it is less than $6,000, said Deva Panambur, a fee-only planner with Sarsi, LLC in West New York and an adjunct professor of personal finance at Montclair State University.

People 50 years and older can contribute an additional $1,000 if they have sufficient earned taxable compensation, he said.

If you or your spouse do not have a retirement plan at work, then you can deduct the entire amount if you select a traditional IRA instead of a Roth.

“If you have a retirement plan at work then deductibility is reduced if your Modified Adjusted Gross Income (MAGI) is over $104,000 and no deduction is allowed for MAGI over $124,000,” he said. “If your spouse has a retirement plan at work — you do not — then deductibility is reduced for MAGI over $196,000 and no deduction allowed over $206,000.”

Panumbur said if you and your spouse file a joint return, then the non-working spouse can contribute to an IRA if the working spouse has sufficient earned taxable compensation.

The amount combined contributions of both spouses cannot be more than the earned taxable compensation reported on your joint return, he said.

“If neither spouse participated in a retirement plan at work, all of your contributions will be deductible,” he said.

To your specific example. if your earned taxable compensation on the joint return is $10,000 in 2020, then the most you can contribute in an equitable manner is $5,000 each, he said.

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This story was originally published on July 29, 2020. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.

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