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My fiance is thinking about starting a ROTH IRA. We are getting married next year. Here's my questions/problems-

Once we are married, our combined income will be over the limit. I thought of starting one this year, also, but my income is over the limit. What happens when she starts a ROTH this year but we cannot add to it next year because of the income limit? Will it just sit there or do we have to convert it to a regular IRA. If so, say in 2000 we fall below the income level, can she contribute then? She is planning on quitting her job after we are married and have a child so that she can be a mom. How will that affect her ROTH? Should we just avoid the ROTH altogether?

Is there anyplace that will offer these answers to me?

Thanks in advance!
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MJune writes:

My fiance is thinking about starting a ROTH IRA. We are getting married next year. Here's my questions/problems-

Once we are married, our combined income will be over the limit. I thought of starting one this year, also, but my income is over the limit. What happens when she starts a ROTH this year but we cannot add to it next year because of the income limit? Will it just sit there or do we have to convert it to a regular IRA. If so, say in 2000 we fall below the income level, can she contribute then? She is planning on quitting her job after we are married and have a child so that she can be a mom. How will that affect her ROTH? Should we just avoid the ROTH altogether?


I reply:

You might also check out the Tax Strategies board with these questions, but I think we can help you here. You will not be forced to convert your fiance's Roth IRA to a traditional IRA -- in fact, I'm not even sure that you'll be allowed to. If your combined income falls below the $150,000-$160,000 phase-out range after you're married (by the way, congratulations!), then you will again be able to contribute to a Roth. Since your income makes it extremely unlikely that you can make deductible IRA contributions, IMHO, taking advantage of the Roth is a no-brainer, but please remember that it's your money. Good luck! --Bob
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MJune - If your fiancee is qualified to contribute to a Roth/IRA because her income falls below the limit for this tax year "do it". If together you'll exceed the limit next tax year you can't add to it, but you can still manage it & watch it grow. In any year your income allows you to make another contribution "do it again" so you can enjoy the tax free growth in value. For more info see: "www.fairmark.com". Best wishes. PP
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