Author Topic: Vanguard account for married couple: retirement, savings, or trust?  (Read 2478 times)

StructureMan30

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My wife and I have some excess money (200K) which we don't know where to store to maximize our return. Down the road we will use this for a home or a business and we don't mind being fairly aggressive with it. If we want to store it in a Vanguard target 2050 fund what is the best way to do it at Vanguard; an IRA, joint savings, or a trust?

protostache

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Re: Vanguard account for married couple: retirement, savings, or trust?
« Reply #1 on: September 20, 2015, 07:30:26 PM »
Is it in a taxable account right now? If so, the most straightforward path is to put it all into a joint non-retirement account. If you're eligible for traditional IRAs, you might benefit from the tax deduction by putting $11k of it there, but pulling it out before you're retirement age may result in taxes and penalties, depending on how you do it.

I don't know enough to talk about a trust account, sorry.

StructureMan30

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Re: Vanguard account for married couple: retirement, savings, or trust?
« Reply #2 on: September 20, 2015, 07:41:11 PM »
Thanks protostache; Right now most of it is in checking accounts.

Frankies Girl

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Re: Vanguard account for married couple: retirement, savings, or trust?
« Reply #3 on: September 20, 2015, 09:00:11 PM »
First, you have to decide what exactly you're going to be planning with the money. If you need it within 5 years or less, then do not invest it in the market without understanding that it might be significantly depleted (depending on the state of the market at any given time) within that 5 year period. That is a short term outlook, and in general investing is not recommended for money needed for a house down payment or similar goals. A high yield savings (well, as high as you can find nowadays) is the move here.

If you are fine with volatility and won't be needing the money in full within 5-10 years or more, then definitely get it in the market and working.

You can't own an IRA jointly - IRA stands for individual retirement account. What you can do is open one for you and one for your spouse and then put in what you can each year. The limits are currently $5,500 per calendar year (this is across both Roth or traditional), so you could sock away $11K for the both of you this year, and do the same thing again each year.

But then you are left with a significant amount of cash that can't be put into tax deferred accounts... so if it was me, I'd start looking hard at work-related retirement accounts that you and your wife have available. If you have 401Ks, 403Bs, whatever... see about maxing the contributions for the rest of the year, which will possibly reduce your paychecks significantly depending on if you're currently signed up) and using the cash to live off of now. And whatever is not needed for living expenses this year, maybe putting into a taxable investment account (again, I don't believe that can be a joint account, but you can name each other as beneficiaries on any accounts) and investing there until you can throw more into the IRAs next year.

That's what I would do anyway.



« Last Edit: September 24, 2015, 04:42:28 PM by Frankies Girl »

MDM

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Re: Vanguard account for married couple: retirement, savings, or trust?
« Reply #4 on: September 20, 2015, 09:37:50 PM »
...I don't believe that can be a joint account...
The rest of the post looks good.  Joint accounts for taxable investing are possible at Vanguard and Fidelity - we have them.  E.g., see https://investor.vanguard.com/investing/joint-account-individual-account for Vanguard.