How Getting Married Impacts Your Roth IRA

Getting married does not automatically impact your Roth IRA. Your portfolio and its tax status are unaffected by your marital status. However, in some situations, getting married can make you income-ineligible for Roth contributions. Additionally, getting married can mean making different plans around your Roth IRA. Here’s what you need to know.

If you and your spouse need help planning for retirement, a financial advisor can help you grow your nest egg.

The IRS has no rules around eligibility for Roth contributions or withdrawals based on marital status. You can continue to make contributions and conversions independent of being married, and the same is true for withdrawals. 

You should note, however, marriage can change things about your household. And your new household composition could impact other rules surrounding your Roth IRA. The most significant element here is the Roth IRA income limit. 

The IRS phases out your ability to contribute to a Roth IRA based on income. In 2024, the phase-out for individual contributions happens between $146,000 and $161,000 of income (and between $230,000 and $240,000 for married couples). So, if your new spouse’s income pushes your household income into or above the phase-out, you cannot make full (if any) Roth contributions. 

You cannot solve the income limit by filing your taxes separately. Specifically to address this issue, the IRS caps married-filing-separately Roth contributions at a $10,000 income limit. This rule also applies as of the last day in the year, meaning that if you get married by December 31, you cannot make contributions at any point in the year. You must withdraw any contributions that you did make by or before filing your taxes.

Though, you can address this issue by making regular conversions from a pre-tax account in lieu of income-based contributions. Either way, your existing portfolio will be unaffected by your new income status. This rule only limits your ability to make new contributions.

While marriage itself doesn’t affect your Roth IRA, it can significantly affect how you plan for your portfolio and its future. A few of the most significant issues include:

Each member of a household can individually contribute to their retirement portfolio. For example, in 2024 you can contribute up to $7,000 to an IRA (traditional or Roth, the cap is shared). This cap applies to both spouses, giving you a household contribution limit of $14,000.

The IRS also allows what is called a “spousal IRA.” If you or your spouse do not work, they can fund their own IRA (traditional or Roth) with household funds. The IRA belongs to the spouse, they just don’t have to be the one who earned the associated income. You must file a joint tax return to do this. 

There is no joint or otherwise shared version of a Roth IRA. However, you can take two steps to ensure that this account is a household asset:

• First, you should name your spouse as a beneficiary under your Roth IRA. This isn’t always strictly necessary, as your spouse will typically automatically assume or retain ownership of household financial assets in the event of your death. However, this can significantly simplify and streamline matters, and is generally good housekeeping.
• Second, you should give your spouse access to the Roth brokerage account. If you use a self-directed Roth IRA, for example through an online trading platform, then you should give them your login information and authorize them as a user as necessary. If you use a brokerage, you should contact your broker to make your spouse an authorized client on the account.

Your spouse should do the same for you on their Roth accounts. Doing this will allow both spouses to share management and income from the Roth portfolios. You should make sure that the surviving spouse has everything they need to continue accessing their income.

Getting married does not have to affect your Roth IRA. That said, it does raise several issues that you should consider around how you share, manage and fund this account.

•  A Roth IRA can achieve annual returns between 7% and 10% on average, depending on their underlying investments. Here’s how you can maximize your Roth IRA returns.
• A financial advisor can help you build a comprehensive retirement plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

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