1) Yes, your wife can make a Traditional IRA Contribution even though she is retired and did not have any "earned" income if she is under the age of 70 1/2 as of 12/31/18. This is known as the "spousal IRA".
2) If she is under the age of 70 1/2 and makes a contribution to her Traditional IRA, it will be deductible if your joint Modified Adjusted Gross Income (MAGI) does not exceed $199,000. If your MAGI is below $189,000 she can make a $5,500 deductible IRA Contribution ($6,500 if age 50 or older) and if it is between $189,000 and $199,000 she will be able to make a
partial deductible contribution.
Please comment below if you need further clarification.
