Author Topic: Two Roth's - now I'm not so sure  (Read 1534 times)

Honda873

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Two Roth's - now I'm not so sure
« on: February 22, 2017, 01:07:48 PM »
First time poster here. Hello all.

I have a Roth IRA in my name and my wife has one in hers . I'm 29 she's 28. We have had them for a couple of years and have been putting in $300 into each Roth each month. Now I'm thinking I should only have one Roth and max it out since neither are currently being maxed. What would you do?

Background:both of us are Montessori teachers who have made around $35k a year. We like our jobs but my wife will be either going to part part time or no time when our second child arrives in August. No other employer 401k.

rubybeth

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Re: Two Roth's - now I'm not so sure
« Reply #1 on: February 22, 2017, 01:13:05 PM »
I'm not sure I understand the question--is it whether you should only have one IRA between you? If that's your question, then I'd say, no, keep your separate IRAs. CORRECTION: you must have separate IRAs, legally. You can't just have one in both of your names. Even if you're each only putting in $300/month, that's fine. You don't need to be maxing them out ($5,500 per year) to be making good use of them.
« Last Edit: February 22, 2017, 01:24:12 PM by rubybeth »

Honda873

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Re: Two Roth's - now I'm not so sure
« Reply #2 on: February 22, 2017, 01:30:03 PM »
I guess the thought is if I max out the one at approx 440 a month and then have 160 in some other form of investment is that better than two at 300 each with otherwise same rate of return.

seattlecyclone

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Re: Two Roth's - now I'm not so sure
« Reply #3 on: February 22, 2017, 01:57:09 PM »
No. A Roth IRA isn't an investment, it's just an account to put investments into. There's no reason to expect you'll do better with your $160 in a taxable account than a Roth IRA, since you can invest in the same things either way.

rubybeth

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Re: Two Roth's - now I'm not so sure
« Reply #4 on: February 22, 2017, 05:38:32 PM »
I guess the thought is if I max out the one at approx 440 a month and then have 160 in some other form of investment is that better than two at 300 each with otherwise same rate of return.

Where is your IRA located? A local bank, Fidelity, Vanguard, somewhere else? An IRA is just an Individual Retirement Account, not a type of investment. The funds in your IRA can be put into anything you like, as long as you meet the minimum amount to buy that fund.

For example, my husband has his IRA with Vanguard and has his invested in VTSMX, I have mine with Fidelity and have it mostly invested in FUSVX. These are just index funds, as recommended by MMM and many others--Jack Bogle's book is a great place to start: https://www.amazon.com/Little-Book-Common-Sense-Investing/dp/0470102101 And one of my favorite episodes of Planet Money: http://www.npr.org/sections/money/2016/03/04/469247400/episode-688-brilliant-vs-boring

Honda873

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Re: Two Roth's - now I'm not so sure
« Reply #5 on: February 22, 2017, 06:20:16 PM »
Yes, thanks- they are both vanguard target dates. One 2050 and one 2055

rubybeth

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Re: Two Roth's - now I'm not so sure
« Reply #6 on: February 23, 2017, 07:02:43 AM »
Yes, thanks- they are both vanguard target dates. One 2050 and one 2055

Why not just put both into VTSAX (VTSMX if you have enough funds)? Then it's as if you have one account.