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Question 1:
My wife works for the state and has been contributing to her retirement plan. The state only gives 25 bucks toward her retirement plan each month no matter what so I figure we should move her retirement plan over to a Roth IRA at a discount broker since we are in such a low tax bracket right now anyway and I would much rather choose my investment from whatever I want rather than have to select from their few choices of mutual funds. Is this a good idea or is there something I am not taking into consideration?


It depends. Sometimes retirement benefits are based upon how many years you contribute to the plan. If you are getting increased percentage of pay type increases, then it might not be wise not to contribute to the plan. Some give you a percentage for every year you are in the plan.

So you need to know how benefits are calculated on the state plan.

Most state plans are very generous and hard to duplicate. They are also guaranteed, where putting money in a ROTH depends upon how well you invest it, diversify it, etc.






Question 3:
Can me and my wife both contribute our annual max allowance into one IRA account or do we have to have separate IRA's?


Depending what type of other retirement plans you have, and your gross income, there are limits. In general, if you have NO plan at work, you can contribute the max to your individual IRA.

You both can contribute to ONE IRA only if one of you is not working. You need two IRAs, if each of you is eligible to contribute.

For example, someone with 401K cannot necessarily have an IRA as well that they are contributing to.

t
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