Roth IRA - owner consideration

[Guest jmshultz]

I've just started looking into investing in a ROTH IRA. One of the first questions asked is the name of the owner. What should I consider with regards to putting the IRA in my wife's name vs. my name? Thanks

[John G]

Welcome to the world of Roth. On your question.... you do not get a choice. The "I" in IRA stands for individual. Each account has on it the name of the taxpayer who is eligible. A "custodian" keeps the records and is the conduit through which the taxpayer makes investment decisions.

Both you and your wife may be eligible for an IRA. However, you can't have a joint one. You can have two separate IRAs, one for each if you both meet the various income and tax filing status regulations.

Custodians normally ask you to name a beneficiary when you open and IRA. For example, you might make your wife the primary beneficiary and your children secondary beneficiaries. The designation of beneficiaries is not related to how the account is registered.... individually.

Post again if you have more questions. You may want to get a copy of IRS publication 590 which covers IRAs and Roth IRAs.

[Guest jmshultz]

Question continued: I've received an unexpected $2000, I would like to open a ROTH IRA. I've got a good retirement savings through my employer, while my wife has very little. We are both eligible to open a Roth. I'm trying to decide if we would be better off putting it all in her name, all in my name, or split the difference. Just wondering if there are any advantages to any of the 3 options. thanks

[John G]

Perhaps the best idea is to put it all in your wife's account. It is a positive thing to do, supporting the spouse. Two accounts are more to track and can hit you with two annual fees. These are relatively minor reasons for making a choice.

Perhaps you can find a little more money from other sources and still do both.