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Need help with first time IRA
Old 01-21-2006, 10:36 AM   #1
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Need help with first time IRA

Hi,
I need some advice. My wife doesn't work, and I have a employer sponsered 401k, with the bulk of my capital in after tax investing. I'm almost 40, and have a high salary. I think I'll set up an IRA for the first time this year. I see two options

1) Do $8k in two Roth's for both me and my wife.
2) Do a traditional $4k for my wife

I'm leaning towards the $8k, so we can dump more in. I understand the Roth is with post tax dollars. Thoughts?
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Re: Need help with first time IRA
Old 01-21-2006, 11:16 AM   #2
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Re: Need help with first time IRA

Without other info, the roths are a no-brainer.

With other info, like when you're planning to retire, what other assets you have, what your marginal tax rate is, and so forth, maybe a different answer. Probably not though.
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Re: Need help with first time IRA
Old 01-21-2006, 11:24 AM   #3
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Re: Need help with first time IRA

Quote:
Originally Posted by danm
I'm almost 40, and have a high salary.
How high is the salary? Are you even eligible for the Roth? It phases out for joint filers for AGI starting at $150,000 and is gone at $160,000. Your income will also effect whether you can deduct the spousal, traditional IRA.
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Re: Need help with first time IRA
Old 01-21-2006, 01:44 PM   #4
 
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Re: Need help with first time IRA

There are calculators out there to help you decide on Roth vs. Trad, like this one.
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Re: Need help with first time IRA
Old 01-21-2006, 04:03 PM   #5
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Re: Need help with first time IRA

You said your wife doesn't work. I think she needs earned income to contribute to an ira.
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Re: Need help with first time IRA
Old 01-21-2006, 04:40 PM   #6
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Re: Need help with first time IRA

Quote:
Originally Posted by aaronc879
You said your wife doesn't work. I think she needs earned income to contribute to an ira.
You think wrong, grasshopper.
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