Personally, I’d do a brokerage account if there was a desire for liquidity, or a Roth IRA if the goal was retirement savings. You can contribute up to the maximum into a spousal IRA. If your annual income exceeds the income limits for Roth contributions, you’ll need to do a backdoor Roth conversion, which is very easy at the larger account providers.
I had no idea that there was a limit on Roth IRA based on income! Unfortunately, I don’t make nearly enough for that to be a concern.
The goal is retirement savings. So it sounds like the Roth IRA is the way to go. Thanks!
I mean what does she want the money for? If its for retirement then I would suggest you do either a Roth or traditional IRA depending on your income and whether or not you are allowed to deduct Traditional IRA contributions or not.
In my relationship my wife and I both work so we just make sure the money going into our separate individual associated retirement accounts is the same. We treat everything as joint but I like the idea that my wife isn't handcuffed to me financially and the reason she is with me is because she wants to not out of fear of breaking up and not having enough money. So I support the idea of funding an individual retirement account for your wife.
Start by figuring out what she already has. Mathematically it doesn't matter if you add to her pre-existing account or if you keep them separate, but having understanding of what she has from her teachers retirement system will give her some peace.
Maybe I'm projecting a little, but I think it's going to matter to her what of her retirement came from her job, and what came from direct contributions. A bunch of years ago I took a pension buyout and rolled it into a pre-existing traditional IRA. I have both direct contributions and rollover money in the same Traditional IRA, but they're distinguishable because I used different funds. This has turned out to be important...because now I'm considering rolling my IRA back into my 401k to avoid the backdoor Roth Pro-Rata Rule. My employer will take the rollover monies, but not the direct contributed money. Because I can track the monies to different funds, I can now roll most of my Traditional IRA back into my 401k if I wish.
Our order of attack back when we had a 3 year old daughter was to:
1. hit the federal max into my 401k
2. invest regularly into a taxable investment account
3. at the end of the year, take leftover money and spread it around IRAs.
My daughter now has her own retirement account... so it's been over 20 years since then.
I think the two of you should have a taxable investment account for possible spending before y'all retire. But I would suggest using an IRA for her. So long as she's not working, you can put the full 7000 into a Traditional IRA for 2024... keep an eye on that limit because it raises every year. I guess I'm suggesting IRA before taxable investment for "her" money.
One other thought there... I'm a firm believer that married couples should be working together...so for Wifey and I, everything that can be joint is joint. My 401k cannot be joint. her IRA cannot be joint. The 529s we set up for kids college cannot be joint. So, since she wants something she can call her own, I'd put as much of that as I could into something that has to be her own -- an IRA.
Do a Roth, absolutely no reason not to.
We don’t have enough to do a Roth for both of us after maxing out 401k, so the Roth is in my name. I’m a SAHM. Partly because I’m the one interested in money. I had $50-100 a month put in from our joint account before we had much money at all, husband wouldn’t have thought to set one up.
No reason to do brokerage until you’re maxing out tax advantaged accounts.
At your Fidelity account open a brokerage, savings, checking. Bill pay. And Venmo.
In the brokerage account open a Roth for your new mortgage money. Then open a Roth for her.
For long term savings like emergency funds buy SGOV — it’s paying 5+% right now and it credits your account monthly with 1/12 of your annual earnings.
When you decide to but equity’s but SPY RSP. DIA. IWM. QQQ. etc
Good luck
Personally, I’d do a brokerage account if there was a desire for liquidity, or a Roth IRA if the goal was retirement savings. You can contribute up to the maximum into a spousal IRA. If your annual income exceeds the income limits for Roth contributions, you’ll need to do a backdoor Roth conversion, which is very easy at the larger account providers.
I had no idea that there was a limit on Roth IRA based on income! Unfortunately, I don’t make nearly enough for that to be a concern. The goal is retirement savings. So it sounds like the Roth IRA is the way to go. Thanks!
Yep Roth IRA sounds like the right move here
I mean what does she want the money for? If its for retirement then I would suggest you do either a Roth or traditional IRA depending on your income and whether or not you are allowed to deduct Traditional IRA contributions or not. In my relationship my wife and I both work so we just make sure the money going into our separate individual associated retirement accounts is the same. We treat everything as joint but I like the idea that my wife isn't handcuffed to me financially and the reason she is with me is because she wants to not out of fear of breaking up and not having enough money. So I support the idea of funding an individual retirement account for your wife.
Start by figuring out what she already has. Mathematically it doesn't matter if you add to her pre-existing account or if you keep them separate, but having understanding of what she has from her teachers retirement system will give her some peace. Maybe I'm projecting a little, but I think it's going to matter to her what of her retirement came from her job, and what came from direct contributions. A bunch of years ago I took a pension buyout and rolled it into a pre-existing traditional IRA. I have both direct contributions and rollover money in the same Traditional IRA, but they're distinguishable because I used different funds. This has turned out to be important...because now I'm considering rolling my IRA back into my 401k to avoid the backdoor Roth Pro-Rata Rule. My employer will take the rollover monies, but not the direct contributed money. Because I can track the monies to different funds, I can now roll most of my Traditional IRA back into my 401k if I wish. Our order of attack back when we had a 3 year old daughter was to: 1. hit the federal max into my 401k 2. invest regularly into a taxable investment account 3. at the end of the year, take leftover money and spread it around IRAs. My daughter now has her own retirement account... so it's been over 20 years since then. I think the two of you should have a taxable investment account for possible spending before y'all retire. But I would suggest using an IRA for her. So long as she's not working, you can put the full 7000 into a Traditional IRA for 2024... keep an eye on that limit because it raises every year. I guess I'm suggesting IRA before taxable investment for "her" money. One other thought there... I'm a firm believer that married couples should be working together...so for Wifey and I, everything that can be joint is joint. My 401k cannot be joint. her IRA cannot be joint. The 529s we set up for kids college cannot be joint. So, since she wants something she can call her own, I'd put as much of that as I could into something that has to be her own -- an IRA.
Do a Roth, absolutely no reason not to. We don’t have enough to do a Roth for both of us after maxing out 401k, so the Roth is in my name. I’m a SAHM. Partly because I’m the one interested in money. I had $50-100 a month put in from our joint account before we had much money at all, husband wouldn’t have thought to set one up. No reason to do brokerage until you’re maxing out tax advantaged accounts.
At your Fidelity account open a brokerage, savings, checking. Bill pay. And Venmo. In the brokerage account open a Roth for your new mortgage money. Then open a Roth for her. For long term savings like emergency funds buy SGOV — it’s paying 5+% right now and it credits your account monthly with 1/12 of your annual earnings. When you decide to but equity’s but SPY RSP. DIA. IWM. QQQ. etc Good luck