Can I Open a Roth IRA Without a Job?
Find out if you can contribute to a Roth IRA without a job. Understand the specific income rules and key exceptions.
A Roth IRA is a retirement savings account funded with after-tax dollars, allowing for tax-free growth and tax-free withdrawals in retirement, provided certain conditions are met. A common question arises regarding eligibility if one does not have a traditional job. Eligibility to contribute is tied to specific income requirements. This article clarifies the types of income that qualify for Roth IRA contributions and explores scenarios where contributions are permissible even without direct employment.
The Earned Income Rule
Contributing to a Roth IRA fundamentally depends on having “earned income.” This term, as defined by the IRS, refers to income received for personal services performed, such as wages, salaries, tips, and commissions. Net earnings from self-employment, calculated after deducting business expenses, also qualify as earned income for this purpose. Income reported on a W-2 form or net profit from a 1099-NEC for contract work would satisfy this requirement.
Conversely, many types of income do not count as earned income for Roth IRA contribution purposes. These include passive income sources like interest and dividend income, rental income from property, and capital gains from investments. Other non-qualifying income sources are pension or annuity income, unemployment benefits, social security benefits, and child support payments. If an individual’s only income comes from these non-earned sources, they cannot contribute to a Roth IRA.
The amount one can contribute to a Roth IRA is limited by either the annual IRS maximum or the amount of earned income, whichever is less. For 2025, the maximum contribution limit for individuals under age 50 is $7,000, and $8,000 for those age 50 or older, which includes a $1,000 catch-up contribution. Your ability to contribute is also subject to Modified Adjusted Gross Income (MAGI) limits, which can phase out or eliminate your contribution eligibility at higher income levels.
Spousal Roth IRA Contributions
An exception to the direct earned income requirement exists for married couples, commonly known as a spousal Roth IRA. This provision allows a spouse with little or no earned income to contribute to a Roth IRA based on their working spouse’s income. To qualify, the couple must file a joint tax return.
The working spouse’s earned income must be sufficient to cover contributions for both their own Roth IRA and the non-working spouse’s Roth IRA. For example, if both spouses wish to contribute the maximum allowed for 2025, the working spouse’s earned income must be at least $14,000, or $16,000 if both are age 50 or older. The contribution is made directly to the non-working spouse’s individual Roth IRA account, as the IRS does not permit joint ownership of Roth IRAs.
Standard annual contribution limits still apply to each individual’s account within a spousal IRA arrangement. This allows couples to maximize their retirement savings even if one spouse is not formally employed or has minimal earned income.