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As long as you meet the guidelines, a non-working spouse can have a Roth, too

Note: The article below refers to the 2018 and 2019 tax years. You have until the tax filing deadline—April 15, 2019—to open an account or make a 2018 contribution to an existing account and until April 15, 2020 to open an account or make a 2019 contribution to an existing account.

Despite the steady rise in families with two working spouses, more than 3 out of every 10 American families have a single breadwinner. So what happens to the spouse who’s home taking care of the kids or doesn’t work by choice or because of a disability?

If they’re prudent, they open a “spousal” IRA. In truth, there’s technically no such thing as a spousal IRA; it’s just a set of rules that allow non-working spouses to contribute to their own retirement.

First, you must file a joint return and, in 2018, your MAGI (modified adjusted gross income) must be less than $189,000 ($193,00 in 2019). In most cases, the spouse can then contribute up to the annual limit (in 2018, $5,500, or $6,500 if age 50 or over; in 2019, $6,000, or $7,000 if 50 or older).

The only wrinkle comes if the working spouse doesn’t have much income. In that case, the spousal contribution is limited to that income minus any Roth IRA contributions the working spouse has already made to his or her own account, In other words, if the working spouse makes $8,000 and contributes $5,500 to an IRA, the non-working spouse can only contribute $2,500 ($8,000 minus $5,500).

Once you determine your eligibility, the process of opening and managing a Roth IRA is the same as for any account holder.

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