Spousal IRA Contributions and the Aggregation Rule

Course: Retirement Planning
Lesson 1: Using IRAs to Build and Distribute More Retirement Income

Student Question:

Hi,

In the review question with the couple where the husband has $84,000 of taxable compensation and the wife only has $1,000, the answer said the wife could contribute up to $7,500 total between her Traditional and Roth IRAs. I originally thought that since his compensation is so much higher than the limit, she should be able to contribute using his compensation on top of her own — almost like they get a combined pool of $7,500 each, so $15,000 total for her. Why doesn’t his extra compensation give her more room?

---

Instructor Response:

Hi,

The spousal IRA rule only solves one problem: it lets the husband’s compensation satisfy the wife’s compensation requirement so she can contribute at all. It doesn’t create extra contribution room on top of her own limit.

And remember Rule 2 also applies here: contributions across all her IRAs are aggregated, so it doesn’t matter how many accounts she has, her total still can’t exceed that $7,500.

Let me know if that helps clear it up!