Can my wife open an account on USAA.com 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?
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.
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 usaa.com/retirement.