Tweaking roths

[Adaministrator]

I currently make /save enough to continue making max contributions on my Roth and my wife's (11k combined yearly). Eventually my wife will go back to work and will contribute to her own Roth.  If there are no advantages to keeping half of my contributions in her account, I am considering periodicity gifting my shares from my wife's Roth to mine.

This would make watching eachothers contributions grow much clearer.

Do you see any advantages to leaving things the way they are?
Or do you have any tips on the gifting process?

[FLBiker]

I think you need to have earned income to contribute to a Roth.  If your wife didn't earn any money, she can't contribute to a Roth IRA.

And I don't think you can transfer Roth contributions from one person to another either.

[Adaministrator]

If a couple is filling married and jointly, the earner can contribute on behalf of the non earner.

This part I have been doing with no trouble.

*I think there may be other constraints like a max combined income (which I'm way under).

[Adaministrator]

I have also read online that this same couple could gift each other  shares from their Roth. It also looks like I would assume the same cost basis as my wife if I were to do this.

However, I don't know this to be fact, as I'm less experienced in this part of the question.

[FLBiker]

If a couple is filling married and jointly, the earner can contribute on behalf of the non earner.

Good to know, my wife is currently a SAHM.  Thanks!

[seattlecyclone]

A working spouse can definitely make contributions to a non-working spouse's IRA. However once the money is in there you can't transfer it amongst yourselves. IRAs are individual accounts.

[Adaministrator]

A working spouse can definitely make contributions to a non-working spouse's IRA. However once the money is in there you can't transfer it amongst yourselves. IRAs are individual accounts.

This is one of the articles that had lead me to believe I could. Maybe it applies to another scenario?

http://fairmark.com/investment-taxation/capital-gain/stocks-and-other-securities/acquiring-stock-spouse/

[seattlecyclone]

Yeah, that article is talking about gifts of stocks in taxable accounts. You can give taxable stock to anyone and the basis will stay the same as when you bought it. IRAs and other retirement accounts don't work that way though.

[GGNoob]

It doesn't make any sense on why you would want to do that...just contribute to each Roth IRA and leave the shares where they are.

[Adaministrator]

It doesn't make any sense on why you would want to do that...just contribute to each Roth IRA and leave the shares where they are.

Thanks, I wasn't sure if there would be any real benefit.

I was really just looking at convince. I would like to control /make investment choices for the funds that I had contributed. And her make decisions for the funds that she had contributed. I just feel that performance tracking will be muddied a bit once her account contains contributions from both of us.

I know that we are a team and that this isn't really a competition... But I'm just wired this way and have fun tracking things like this.

[GGNoob]

It doesn't make any sense on why you would want to do that...just contribute to each Roth IRA and leave the shares where they are.

Thanks, I wasn't sure if there would be any real benefit.

I was really just looking at convince. I would like to control /make investment choices for the funds that I had contributed. And her make decisions for the funds that she had contributed. I just feel that performance tracking will be muddied a bit once her account contains contributions from both of us.

I know that we are a team and that this isn't really a competition... But I'm just wired this way and have fun tracking things like this.

Well you could always open a new Roth IRA and leave her old one alone if you really wanted. Otherwise you could just leave the funds alone and invest in new ones, but that option won't work if your preferred funds overlap.

Anyhow, if you contribute to her IRA it's still her funds so she could still control it and invest it as she sees fit.