Though your financial situation may change throughout the years, the need to set aside funds for your retirement years is important regardless of your employment status. If your spouse is currently unemployed, you can still contribute to her Roth IRA, or open an account for her if she does not already have one.
Roth IRAs Explained
Roth IRAs, or individual retirement accounts, allow you to set aside money for your retirement in a tax sheltered account. Unlike traditional IRAs, which allow you to deduct contributions from your income taxes on a yearly basis, Roth IRAs are funded with after-tax dollars. The upside is that you are not required to pay taxes on the money you've accumulated when you begin withdrawals after your retirement, with a few exclusions.
Can You Contribute to a Spouse's Roth IRA Account?
In order to contribute to a Roth IRA, whether for yourself or a spouse, your contributions must satisfy the Internal Revenue Service's contribution guidelines. As of 2012, you must be married and filing jointly with a modified adjusted gross income of less than $179,000 (that is, money earned through work, rather than through investments) in order to qualify for contributions to a Roth IRA for either yourself or your spouse.
How Much Can You Contribute?
The IRS dictates how much you can contribute to an IRA, including Roth IRAs, in a tax year. This also covers contributions to a non-working spouse's Roth IRA. As of 2012, you can contribute up to $5,000 ($6,000 if you are over the age of 50) to each spouse's IRA for the year. If your modified AGI is close to the $179,000 threshold, the amount you are allowed to contribute may be less. At the other end of the spectrum, you can only contribute as much as your earned income, so if your income for the year is $7,000, that is the most you can contribute to both IRAs.
Can You Open a Roth IRA Account for a Non-Working Spouse?
Although most IRA accounts require the account holder to have evidence of earned income, a working spouse can open a Roth IRA account for a non-working spouse with no earned income. The account must be opened by the working spouse, and any contributions to the account must be made by the employed spouse and must fall under the IRS guidelines for contributions.
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