Working Past 70 and Still Contributing to a 401(k)? The IRS Lets You Keep Going, but Your Spouse’s IRA Stops Taking Money the Year She Stops Earning, Unless You Fund It for Her
One paycheck is still coming in, but two retirements need funding, and a little-known IRS provision lets a working spouse's earnings count for both accounts, though missing one condition wipes out the benefit entirely.
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He’s 71, still collecting a paycheck and maxing out his 401(k). She’s 68 and retired last year. Starting in 2026, her first full year with no earnings, her IRA can’t take a contribution based on her own pay, because she has none.
She can still contribute up to $8,600 this year. The spousal IRA, a provision in Section 219(c) of the Internal Revenue Code, allows this if he funds it, they file jointly, and his pay covers both contributions.
Age Limits on IRA Contributions Disappeared in 2020
A 401(k) has never had an age cap. As long as you’re on payroll, you can contribute pay into it. In 2026 you can put in up to $24,500, plus an $8,000 catch-up if you’re 50 or older, for a total of $32,500.
Traditional IRAs worked differently. Contributions used to stop in the year you turned 70½. The SECURE Act removed that cutoff, so traditional IRA contributions are now allowed at any age. The only test left is compensation, meaning wages, salaries, tips, bonuses and net self-employment earnings. Social Security, pension payments, rental income, interest and dividends don’t count.
That’s why her own IRA eligibility ends once her paychecks do. Social Security doesn’t count as compensation.
How Section 219(c) Lets One Paycheck Fund Two IRAs
Under the spousal IRA rule, the working spouse’s compensation counts for both partners. To qualify, spouses must file taxes jointly, and at least one must have taxable compensation. The couple’s combined IRA contributions can’t exceed their joint taxable compensation. The account is in her name, and she owns it outright.
Suze Orman summed up the rule on a January 15, 2026 podcast: the working spouse “can fund it not only for themselves, but for the spouse as well.”
Worked Example: One $95,000 Paycheck Funds Three Accounts
Assumptions: tax year 2026, married filing jointly, $95,000 in wages for him and none for her. He makes all his 401(k) deferrals pretax. That’s allowed because his 2025 Social Security wages were below the $150,000 line that forces catch-up contributions into a Roth.
| Item (2026) | Amount |
|---|---|
| His 401(k) deferral | $32,500 |
| His taxable W-2 wages after deferral | $62,500 |
| His IRA | $8,600 |
| Her spousal IRA | $8,600 |
| Combined IRA contributions | $17,200 |
| Total household retirement savings | $49,700 |
They pass the compensation test easily. The $17,200 in IRA contributions sits well below his $62,500 in taxable wages.
If their last dollars fall in the 22% bracket and her contribution is deductible, her spousal IRA cuts about $1,892 from their 2026 federal tax bill. A lower AGI can also reduce how much of their Social Security gets taxed.
She isn’t covered by a workplace plan, so her deduction doesn’t phase out until joint MAGI reaches $242,000 to $252,000. He’s an active 401(k) participant, so his IRA deduction phases out at joint MAGI of $129,000 to $149,000. If he continues working five more years, her account collects $43,000 in contributions before any growth.
Check the Age-70½ Charity Trap Before Choosing a Traditional IRA
Most couples miss this interaction. Deductible traditional IRA contributions made after age 70½ may reduce the amount of future QCDs that can be excluded from income. A qualified charitable distribution (QCD) lets IRA owners 70½ and older send up to $111,000 in 2026 directly to charity, tax-free.
He’s 71, so every deductible dollar he adds to his own IRA cuts his future tax-free giving by a dollar, and the reductions add up over the years. If the couple gives to charity, a Roth IRA may suit him better. Roth contributions use the same spousal rule, phase out at joint MAGI of $242,000 to $252,000 and never require distributions for the original owner. She won’t reach 70½ for another couple of years, so her deductible contributions are safe from this rule until then.
Three Moves That Keep Both Accounts Growing
- Fund her IRA by the filing deadline. Make 2026 spousal contributions by April 15, 2027.
- Let the 401(k) ride past 73. Under the still-working exception, anyone who doesn’t own 5% or more of the company can wait until retiring to take required minimum distributions from a current employer’s plan. His IRAs get no such exception. RMDs start at 73 for people born 1951 through 1959.
- Continues contributions at or below compensation. Excess contributions trigger a 6% excise tax for every year they remain in the account.
Whether traditional or Roth fits better depends on your tax bracket now versus later, Medicare premium surcharges and your charitable plans. That’s math worth running with a qualified tax or financial professional.
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Vilma Rios is a tax professional and tax content contributor with more than 15 years of experience in tax and accounting. She specializes in federal tax research, tax education, and translating complex tax rules into clear, practical information for individuals, families, and small-business owners.
Vilma is a Content Tax Contributor II with the National Association of Tax Professionals (NATP), where she contributes to tax education and professional content. She has also presented tax information through webinars, including Spanish-language tax education, and has appeared on Telemundo 47 discussing tax topics and helping viewers understand important tax-filing requirements.
Her experience also includes tax and accounting work, tax research, IRS-related matters, and public tax education. While in college, Vilma volunteered in an IRS-sponsored tax assistance program and was recognized for her community service by local and state officials.
Known as “Your Tax Geek,” Vilma is passionate about making taxes easier to understand and helping people navigate an increasingly complex tax system.
