Author Topic: Getting Married and Reaching Roth IRA Contribution Limits  (Read 1886 times)

meh123

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Getting Married and Reaching Roth IRA Contribution Limits
« on: November 27, 2016, 06:11:57 PM »
My boyfriend and I are planning to get married in 2017.  My income is a stable 70k, and while his varies, he is currently on track to make $136k this year.  His income will continue to increase.  When we do get married, our household income will most likely be over the Roth IRA limit. 

I currently have a Roth IRA set up, and contribute $211.53 each bi-weekly paycheck to max it out each year.

My questions:

 Since we are getting married in 2017, do I need to stop my Roth IRA contributions come January 1? 
Can I keep making them, and then pause them after we are married?
Do I switch to a backdoor Roth IRA or open a traditional IRA?

Anything other considerations or issues I am overlooking?

Thanks!

Gunga Galunga

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Re: Getting Married and Reaching Roth IRA Contribution Limits
« Reply #1 on: November 27, 2016, 06:16:19 PM »
Will you be maxing out your 401k's? At $206k of gross income, if you are both maxing out your 401k you will have taxable income of $180k. I believe Roth IRA limits will begin to be phased out at $186k in 2017, so if you max out both 401k's you will not run into any issues with your Roth IRA contributions.

I see his income will continue to rise, so it is possible that even with maxing out you will run over this $186k threshold. But knowing your 401k contributions will help figure it out a bit more.
« Last Edit: November 27, 2016, 06:17:58 PM by Gunga Galunga »

meh123

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Re: Getting Married and Reaching Roth IRA Contribution Limits
« Reply #2 on: November 27, 2016, 06:32:45 PM »
We do both max out our 401k/TSP accounts, and plan to continue to do so.

He currently works for the government, and has scheduled pay increases.  He will be getting a pay increase of a couple thousand in March 2017, and a $15k pay increase in March 2018.

csprof

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Re: Getting Married and Reaching Roth IRA Contribution Limits
« Reply #3 on: November 27, 2016, 06:37:29 PM »
Will you be maxing out your 401k's? At $206k of gross income, if you are both maxing out your 401k you will have taxable income of $180k. I believe Roth IRA limits will begin to be phased out at $186k in 2017, so if you max out both 401k's you will not run into any issues with your Roth IRA contributions.

I see his income will continue to rise, so it is possible that even with maxing out you will run over this $186k threshold. But knowing your 401k contributions will help figure it out a bit more.

Or, generalizing this a bit - remember that the Roth contribution limit is based upon your MAGI, and there are several things that reduce your AGI, pre-tax 401k contributions among them.    HSA contributions - which you could do up to 6,750 -  too, plus various smaller things such as qualified tuition payments, etc.

meh123

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Re: Getting Married and Reaching Roth IRA Contribution Limits
« Reply #4 on: November 27, 2016, 06:54:36 PM »
I should have clarified further regarding his income: there is no real way for us to predict what his total income will end up being for any given year.  He works unpredictable overtime and gets night, weekend and holiday differentials.  The only constant is that in the past 10 years, his income has always increased from the previous year. 

Given that we are talking about missing the income limit by just a few thousand dollars, I think I need to assume that we will be over the limit.  I could hold off on making the bi-weekly contributions and just make a lump sum $5,500 Roth payment in early spring if we end up under the income thresh hold?

csprof

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Re: Getting Married and Reaching Roth IRA Contribution Limits
« Reply #5 on: November 27, 2016, 07:25:03 PM »
I should have clarified further regarding his income: there is no real way for us to predict what his total income will end up being for any given year.  He works unpredictable overtime and gets night, weekend and holiday differentials.  The only constant is that in the past 10 years, his income has always increased from the previous year. 

Given that we are talking about missing the income limit by just a few thousand dollars, I think I need to assume that we will be over the limit.  I could hold off on making the bi-weekly contributions and just make a lump sum $5,500 Roth payment in early spring if we end up under the income thresh hold?

thumbs up.