Can I open a Roth IRA for my wife now that she is no longer working?


Can my wife open an account on and open her own Roth IRA rolling her TSP into it? She was a DOD civilian but is no longer working for the gov. She is not employed currently either but from what I understand, I can contribute to hers as long as we are filled jointly and make less than a certain amount?

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Answers (1)

Answers (1)


Thank you for the great question.  The short answer is yes, as long as you are married and file jointly, your wife can open a Roth IRA in her name, and it can be funded  from your income.  It’s lovingly called a “Spousal IRA”.  In 2019, for those who married filing jointly, with income less than $193K, you can contribute up to the maximum of your earned income or $6,000 per person.  Individuals age 50 or over can contribute an additional $1,000 per person as a catchup provision. If your income is between $193,000 and $202,999, your contribution amount begins to phase out and if you make $203,000 or more, you are ineligible for a direct contribution to a Roth IRA but might want to investigate a “Backdoor Roth IRA” if this situation applies to you.


However, when you mentioned moving your wife’s Thrift Savings Plan (TSP) account, it caught my attention, so I wanted to give you a few additional things to consider.

  1. The TSP is low cost:  In comparison to the average mutual fund fees charged in the market, the TSP is very attractive. 
  2. TSP Withdrawals:  With the TSP Modernization Act of 2017, we will see better options on how you can withdraw funds from the TSP to meet your needs.  TSP is expected to implement these measures in Q4 of 2019. 
  3. Can I have both?  Yes, you can have both a TSP account and a Roth IRA.  You can leave your wife’s TSP account intact and then open a Roth IRA for new yearly contributions.  Just because she is no longer employed by the government does not mean she has to remove money from the TSP.  Don’t forget that option.
  4. Mind your options:  TSP has options for withdrawals after leaving Federal service that a Roth IRA does not have. In the TSP, if you separate from service during or after the year you reach age 55 (or the year you reach age 50 and meet the qualifications listed by the IRS), the 10% penalty for early withdrawals does not apply.  Therefore, you might be able to withdraw money from TSP without a penalty before you can access it within a Roth IRA.  If this qualification is something than can benefit you, you could be losing it by moving your TSP account to a Roth IRA.
  5. Mind the taxes:  If you decide to move the TSP account it must transfer to the same kind of account at the new custodian.  That means you must move the Traditional portions of the TSP into a Traditional IRA at the institution you chose and then convert it into a Roth IRA if that is what you want to do.  Since you haven’t yet paid taxes on the Traditional TSP portion, you could have a big upfront tax bill.  Anytime you are transferring between accounts, we recommend seeking out reputable tax advice before making any decisions.

I hope this discussion helps as you make your decision.  Also, I would not be a good financial planner if I did not also encourage you to have a retirement plan.  If you already have one, congratulations.  If you don’t, considering beginning with our easy to use calculator at