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Author: lanyib Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76395  
Subject: IRA questions (I'm a newbie) Date: 7/31/1999 7:41 PM
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Hi all!

I have just recently joined Fooldom and so far I like everything I've seen. However I have a few questions:

My wife and I are jointly filing and our AGI is over $58,000. I am enrolled in my employer's 401K plan and contribute the maximum amount possible. I plan on establishing a Roth IRA for myself but I don't know which option would be better for my wife. Can I contribute to a Spousal IRA in her name even though she has income? Or if she starts contributing to a deductible IRA and later stops working, can that amount be rolled over into a Spousal? Urrr... I think I've asked enough questions for starters.

Thanks for your response in advance!

LanyiB
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Author: zgriner Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12675 of 76395
Subject: Re: IRA questions (I'm a newbie) Date: 8/1/1999 2:22 AM
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Since you are filing jointly, stop thinking about his and her money. It's our money. The IRS doesn't care where the money for your or your wife's IRA comes from, as long as one of you has an income to cover the contribution. Even if your wife stops working, you can still contribute to her IRA.

The real question you need to ask yourself, is whether it's better to open a regular IRA or a Roth, based on your AGI.

Zev

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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12678 of 76395
Subject: Re: IRA questions (I'm a newbie) Date: 8/1/1999 8:04 AM
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Greetings, LanyiB, and welcome. You wrote:

<<My wife and I are jointly filing and our AGI is over $58,000. I am enrolled in my employer's 401K plan and contribute the maximum amount possible. I plan on establishing a Roth IRA for myself but I don't know which option would be better for my wife. Can I contribute to a Spousal IRA in her name even though she has income? Or if she starts contributing to a deductible IRA and later stops working, can that amount be rolled over into a Spousal? >>

Yes, you may contribute to your spouse's IRA based on your joint income. If that contribution is to a traditional IRA and if she is not participating in a retirement plan through her own employment, then that contribution is fully deductible while your joint AGI remains at $150K or less. OTOH, if she does have a plan at work to which she or her employer contributes, then your current AGI is too high to make a deductible contribution to her IRA. In that case, a Roth IRA contribution is better.

BTW, a spousal IRA is simply a term for a traditional IRA that's established to receive contributions on the behalf of a non-employed spouse. Yours is employed, so the term doesn't apply. Even if it did, a traditional IRA is a traditional IRA, so her working or not working would make no difference.

Regards..Pixy

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Author: lanyib Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 12684 of 76395
Subject: Re: IRA questions (I'm a newbie) Date: 8/1/1999 12:18 PM
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Hi

This is exactly what I was looking for! I'm so glad I posted here! I guess the terminology really IS confusing since all the while I've been thinking about these IRAs as being totally separate. Thanks, Bob and Zev for enlightening me!

Keep up the Foolishness :-)!!!

LanyiB


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