|
Setup Roth IRA for spouse already retired?
11-03-2013, 07:44 AM
|
#1
|
Full time employment: Posting here.
Join Date: Aug 2013
Location: New Jersey
Posts: 892
|
Setup Roth IRA for spouse already retired?
Is it possible to setup a Roth IRA for a spouse that's already retired? I am still working, and I've setup one for myself this year. The reason for setting up a Roth IRA for DW is it would help to keep us in the 15% tax bracket if some of the money in her traditional IRA could be converted to a Roth IRA in a couple of years - and I keep reading about the 5 year rule for Roth IRA withdrawals after age 60 (she is 55 now).
|
|
|
|
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
|
11-03-2013, 08:03 AM
|
#2
|
Thinks s/he gets paid by the post
Join Date: May 2007
Posts: 1,525
|
Quote:
Originally Posted by Al18
Is it possible to setup a Roth IRA for a spouse that's already retired? I am still working, and I've setup one for myself this year. The reason for setting up a Roth IRA for DW is it would help to keep us in the 15% tax bracket if some of the money in her traditional IRA could be converted to a Roth IRA in a couple of years - and I keep reading about the 5 year rule for Roth IRA withdrawals after age 60 (she is 55 now).
|
Yes is the answer to the setup question. Google "Spousal Roth IRA" and you'll find articles and links like this one.
Boost retirement savings through a spousal IRA - MarketWatch
(I didn't try "Kay Bailey Hutchison IRA". Who knew?)
__________________
No doubt a continuous prosperity, though spendthrift, is preferable to an economy thriftily moral, though lean. Nevertheless, that prosperity would seem more soundly shored if, by a saving grace, more of us had the grace to save.
Life Magazine editorial, 1956
|
|
|
11-03-2013, 09:32 AM
|
#3
|
Thinks s/he gets paid by the post
Join Date: Jan 2006
Posts: 4,172
|
The spousal IRA is a good thing to do if you are still working and have the funds to fund the IRA contributions. If you weren't working, you could not fund the
Roth IRA with contributions, but you could still open one and fund it w/ conversion contributions from your TIRA........there would be no limit on this except those imposed by yourself for tax considerations and the funds in your tax-deferred accounts.
|
|
|
11-03-2013, 10:48 AM
|
#4
|
Dryer sheet wannabe
Join Date: Nov 2013
Posts: 15
|
Yes, you can contribute to a Roth IRA for your wife, even if she is retired, as long as you have enough earned income to fund it or are converting it from a tIRA as kaneohe pointed out.
I'm still young, in my 20's, and my wife is enjoying her early retirement immensely while staying home and taking care of our son, though we're both still dependent on my income. My Roth IRA is fully funded and as soon as my salary increases, we'll be opening up one for my wife as well.
The only difference between my wife and yours is age, but for some reason people perceive anyone under ~55 y/o as "unemployed" and those older and not working as "retired". However, in terms of IRA rules, it makes no difference what the employment status of the account holder is, as long as you have an eligible way to fund it.
|
|
|
11-03-2013, 01:09 PM
|
#5
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
|
Quote:
Originally Posted by StickInTheMud
The only difference between my wife and yours is age, but for some reason people perceive anyone under ~55 y/o as "unemployed" and those older and not working as "retired". However, in terms of IRA rules, it makes no difference what the employment status of the account holder is, as long as you have an eligible way to fund it.
|
Yeah. I'm 48 and I call myself "semi-retired" or "on sabbatical" for now. It's easier than fielding all the comments about being way too young to retire and I need to do something so I don't rot.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
|
|
|
11-03-2013, 02:35 PM
|
#6
|
Full time employment: Posting here.
Join Date: Aug 2013
Location: New Jersey
Posts: 892
|
OK, thanks for the great advice.
|
|
|
12-16-2013, 08:45 AM
|
#7
|
Thinks s/he gets paid by the post
Join Date: Mar 2011
Location: North TX
Posts: 1,788
|
Also, you may qualify for the "savers tax credit" if you fall below $35k-ish. You can get 50% credit on up to $2000 for you and your spouse. My mom and husband will both do this and get $2k back on taxes for opening a $2k Roth for both of them.
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Thread Tools |
|
Display Modes |
Linear Mode
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|