Newbie mistake

[wirednuke83]

Hey all,

I just started investing this year, and I've been learning something every day. My wife is a homemaker, and I didn't realize that I could open an IRA for her as well. I had maxed out my 401k, maxed out my IRA, and I had the leftovers in a brokerage account. Should I pull the money from the brokerage account to max out my wife's IRA, or just let it ride? I know I would have to pay taxes if I sold at this point.

Thanks for your advice!

[terran]

I would probably empty the brokerage to contribute to your wife's IRA. How much are the gains at this point? You could consider waiting a year so they become long term gains, but probably not worth it unless your investment has really shot up. Remember that you have until the tax filing deadline (around April 15th) to contribute.

[appleshampooid]

Best case is you would be able to save enough to do both (keep the taxable account and ALSO fund your wife's IRA). But understandably you may not have enough cash flow to do that.

The market has been pretty flat this year, so I would check your cost basis. You probably only have a small gain or even a loss. In that case, selling and funding the IRA wouldn't be that painful.

[Davnasty]

If you've already contributed $24,000 I would imagine you'll have another $5,500 by April 15th. No need to sell if that is the case, you can move it all to the IRA right up to the day you file.

[wirednuke83]

I decided to leave it until April. If I still haven't maxed it out by the time tax season rolls around, i'll transfer it over.

It seems like an obvious answer now, but it was eating at me. Thanks for the responses!