Author Topic: IRA's for Married folks?!  (Read 2106 times)

whitedragon

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IRA's for Married folks?!
« on: July 11, 2014, 06:54:17 AM »
So, I'm a relatively new mustachian, and I'm just now learning about how to be good with money and not be a consumer zombie. 

So this year, I've started and fully funded my own Roth IRA at 5500 and have been maxing out my 401k at work.  My plan is to FI in 10 years by rolling my 401k funds into a Roth after I leave my job, setting up the conversion ladder and such.  However, I didn't realize that my wife can also do an IRA.  Should she contribute another 5500 to a Roth this year, or should we both be going into a traditional to help offset some tax burden for us both, or is that even possible?

I've read the Mad FIentist's "Retire Even Earlier" posts and it seems like both of us contributing to a traditional IRA would allow me to deduct an additional 11000 a year, but is that really right?  That seems kinda crazy, also, I'm worried that I run the risk of saving too much money in traditional tax advantaged accounts that it ends up costing me more in the future to roll them over into a Roth in the future!

Any help or advice would be appreciated, or facepunches too.

matchewed

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Re: IRA's for Married folks?!
« Reply #1 on: July 11, 2014, 06:57:59 AM »

Fatmouse

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Re: IRA's for Married folks?!
« Reply #2 on: July 11, 2014, 08:08:08 PM »
Do you and your wife make more than $96k annually?  It looks like there are some caveats to the $11k deduction possibility, depending on your situation.  Depends on whether one of you has access to a 401k (you do), and your joint income.
http://www.irs.gov/Retirement-Plans/IRA-Deduction-Limits
« Last Edit: July 11, 2014, 08:09:56 PM by Fatmouse »

Cheddar Stacker

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Re: IRA's for Married folks?!
« Reply #3 on: July 11, 2014, 09:12:28 PM »
Mr. Dragon, you are likely better off with traditional ira's. You can both do them if you are within the limits. Google root of good. He has a great post on taxes that is mind boggling and shows what you can do with the right foundation. Plus he's a very active member on this forum.

whitedragon

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Re: IRA's for Married folks?!
« Reply #4 on: July 14, 2014, 11:31:18 AM »
@Fatmouse,

We do not make more than 96K, and I do have the 401k, so I think we are good to go in that regard.

@Cheddar Stacker

I read up on Root of Good and it's given me alot more to chew on.  Now I just want to pay as little taxes as possible just to see if I can!