Adding someone to Account Recovery Contact

I'm trying to set up my Account Recovery Contact. I want to add my wife, but I get the message: you can only add contacts who are using iMessage. Of course she is using it, we text all the time using iMessage and she's in our Contacts.

I'm using a M1, 2020 Mac mini with macOS Ventura 13.1. Everything is updated as of today. My wife is using an iPhone 8 iOS Version 16.2 (20C65).

I tried "Choose Someone Else" and choosing her from the Contacts with no luck.

Any help would be greatly appreciated!