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Subject:  Re: Basic Question Date:  5/18/2004  4:53 PM
Author:  dsemmler Number:  41038 of 100057


My wife is contemplating not working next year. We both currently max out our Roth IRA's. So while she has no earned income next year, can we (I) still contribute money to her Roth IRA?

Yes. My DW is a SAHM and her IRA has been maxed out for the last few years. You may see the term Spousal IRA, basically if you are married and filing jointly, as long as the total AGI is greater than $6000 ($7000 if making catch-up contributions age permitting) you can both fund an IRA.

If I was working for a small company that offered no retirement account plans, what options besides my Roth IRA do I have to invest for retirement?

Based on your question, I assume you are referring to tax-advantaged retirement savings. Unfortunately, your options are pretty limited. Unless you can convince your employer to offer something along the lines of a SIMPLE-IRA or 401k, your best option will most likely be a taxable account. The only other option I can think of would be annuity but typically those are not an ideal option for most people.

Have you asked your employer about a retirement plan? When I first started with my current employer, which is about 6 people total, I was told there were no retirement plans because the cost was high and it required all employees to participate equally. After doing some research, I found that a SIMPLE-IRA offered a relatively low-cost option and not all employees were required to participate. I have my SIMPLE-IRA with Vanguard and have been extremely pleased. Essentially, my employer was not offering a plan because they were not aware of all the options. So ask around and do a little research at work.

If you opt to invest in a taxable account, try to keep the tax favored investments in that account while keeping non tax-favored investments in your Roth. This may or may not be an issue for you depending on your investment selections.

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