2 Roths or 1?

[crabbypatty]

Say that after 401k contribution I don't have enough to fully fund one Roth. Is it better to fund as much as I can for one person, or partially fund a Roth for both myself and DH?

I guess this is assuming that the Roths are in different funds.

[pearlieq]

DH and I each fund our own Roths. It just seems easier and safer that way. If we were ever to split up (God forbid) it makes it neat and clean.

[jIM_Ohio]

Say that after 401k contribution I don't have enough to fully fund one Roth. Is it better to fund as much as I can for one person, or partially fund a Roth for both myself and DH?

I guess this is assuming that the Roths are in different funds.

Depends on account fees and account minimums. T Rowe charges me $10 for each fund under 5k, unless my assets are more than 10k combined.

Each of my 6 mutual funds is a seperate account, so it's better for me to get my Roth to 10k before my wife even starts hers.

But if you have a way around fees like this, less of an issue.

[MonkeyMama]

I have to agree - depends with the fees, minimums, etc.

I haven't thought so much what if we split - but is probably a good point. KEep it even.

My goal this year is to fund dh's ROTH. Our IRAs are all pretty close but I am working and getting retirement funds. Also, he has the most fundable vehicle right now and more of the stocks which we are moving more towards. So we will fund his entirely first. Aiming $2k-$5k in mine, but since I am getting so much from my employer this year, my IRA is pretty secondary.

At my last job I had a 401k and we always funded his IRA. In fact we just converted to ROTHS so I can have a chance to contribute more to an IRA - have been limited with my traditional IRA for years... But with my employers money leaves us pretty even and that is a worthy goal going forward - being fair to both of us.

[disneysteve]

DH and I each fund our own Roths. It just seems easier and safer that way. If we were ever to split up (God forbid) it makes it neat and clean.

Divorce is one issue, but so is death. Better to already have half the money in your own name if your partner dies so that it isn't considered part of his estate. I don't know the details but I think there are also issues with how you have to handle inherited IRA accounts that aren't always in your favor.

[creditcardfree]

If you are a spouse, you can roll over an traditional or roth ira of the deceased spouse, to your own...no taxes, no complications...other than paperwork and a death certificate.

If you inherit an ira from someone else, it does get more complicated because you will pay taxes on the traditional. The money has to come out in full within five years, with some money (a minimum amount) coming out every year. Generally, in this case, take money out by Dec 31st of year following the year of death.

My husband and I put money into our roth's evenly...regardless of fees, ect. Eventually, you'll have enough in the accounts to waive some fees. In other words, some of these fees are temporary.

[disneysteve]

If you are a spouse, you can roll over an traditional or roth ira of the deceased spouse, to your own...no taxes, no complications...other than paperwork and a death certificate.

Thanks for clarifying that.

[Ima saver]

The years that we could not afford to both fully fund our roth ira's, I generally did mine first and what left went into the ira of dh. The reason being, I was 7 years older than he and would hit the age of 59 1/2 first, in case we needed the money.

[jIM_Ohio]

The best investment for a possible divorce is a prenup. If you don't have a prenup, regardless whose name whatever was in, I'd expect the other to get half.

[crabbypatty]

The best investment for a possible divorce is a prenup. If you don't have a prenup, regardless whose name whatever was in, I'd expect the other to get half.

This reminds me. I have a friend who was married for 8 months. When she retires in 30 years, her ex-DH will get half of the payout based on 8 months worth of her contributions to her teachers pension. I'm not quite sure how they work that out, it seems awfully complicated to me.

[Ima saver]

Maybe he will forget about that after 30 years!!

[poundwise]

The years that we could not afford to both fully fund our roth ira's, I generally did mine first and what left went into the ira of dh. The reason being, I was 7 years older than he and would hit the age of 59 1/2 first, in case we needed the money.

Your plan seems fine to me but I did want to point out something that many people seem to be misunderstanding about Roth IRAs.

"Withdrawals of earnings upon death or disability, for first time home-buying or after age 59 ½ are tax-free provided a 5 year wait has occurred."

But...

"Contributions can be withdrawn at any time without penalty or tax."

[glock35ipsc]

Is it better to fund as much as I can for one person, or partially fund a Roth for both myself and DH?

I was under the impression that a Roth could only be held for an individual, and not as a joint account?

[sweeps]

I was under the impression that a Roth could only be held for an individual, and not as a joint account?

That's correct. OP is referring to whether they should fund just 1 Roth, or partially fund both OP's Roth and OP's spouse's Roth. It's an interesting question.

[glock35ipsc]

That's correct. OP is referring to whether they should fund just 1 Roth, or partially fund both OP's Roth and OP's spouse's Roth. It's an interesting question.

OK, gotcha!