IRA Questions

[Guest Mandy76]

Hi,

I am 29 years old, married, and looking into starting a roth ira. My husband has a state retirement plan through his place of employment, and I am self employed working out of my home. I don't have any retirement savings . I was originally going to have my husband start one for himself and one for myself, but since our income does not afford for us to be able to contribute the maximum amount annually to both ira's, would it be better for me to open one for myself and contribute the maximum, instead of us both opening one and only be able to put 2,000 a year in each?

Thank you,

Mandy

[John G]

Good question.

On a very simple level, having two separate accounts adds to recordkeeping and may mean you pay two sets of annual fees.... although you can mitigate the fee issue (search on "annual fees" or just "fees" on this message board for more info).

A more complex issue relates to the difficult topic of marital assets. Roths and IRAs are individual assets and if your marriage ends in divorce, the name of the account may influence who keeps the funds. Another subtle issue is that IRA/Roths have death beneficiaries. Often you name your spouse as primary. But you may have different ideas about who comes next... sisters, children, etc. There may be other issues such as different ages (who hits 59 1/2 first) or different approaches to investing. Another factor might be the "education" issue - who is willing to spend time to pick mutual funds and monitor the results. It can be a joint project, but perhaps you are more interested.

I would lean towards you getting started with a Roth and building up your investment experience. After a few years, perhaps you both will be funding Roths. But... this is a very personal issue and it would make a lot of sense for both of you to spend some time talking about your goals and agreeing upon a "plan".