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Spousal IRA and Vanguard

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  • Spousal IRA and Vanguard

    Hi community,

    I plan to open up individual and spousal IRA for 2020 with vanguard to convert to roth via the backdoor. I have a couple of technical questions. Do I need to open up a seperate account with vanguard for my wife's spousal IRA and convert it on her account? Or, can I add 12000 to my individual IRA for her and me and then convert it? Any advice how to go about doing the spousal IRA? Best.

  • #2
    read: https://forum.whitecoatinvestor.com/...-ira-home-base

    IRAs are individual.

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    • #3
      Thanks, Peds. I checked out the link. It doesn't answer my question, or I need some more clarification. Can I contribute her individual half on my vanguard account? Thanks

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      • #4
        Originally posted by psych007 View Post
        Thanks, Peds. I checked out the link. It doesn't answer my question, or I need some more clarification. Can I contribute her individual half on my vanguard account? Thanks
        IRAs are individual. she needs a separate account for her individual self.
        the income to fund them is joint.

        you could have also tried to add 12K to your IRA at Vanguard. what did you see happen?

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        • #5
          It might just seem like semantics, but it is a necessary distinction. This no such thing as a Spousal IRA account, only spousal IRA contributions and you don't do anything with regards to your spouse's individual retirement accounts.
          • Your Backdoor Roth
            • Open traditional IRA and Roth IRA accounts.
            • Make a non-deductible traditional IRA contribution based on your available IRA compensation.
            • Do a Roth conversion of the non-deductible basis and any associated pre-tax earnings to your Roth IRA account.
          • Your Spouse's Backdoor Roth with a spousal contribution
            • Opens traditional IRA and Roth IRA accounts.
            • Makes a non-deductible traditional IRA contribution based on your remaining available IRA compensation.
            • Does a Roth conversion of the non-deductible basis and any associated pre-tax earnings to their Roth IRA account.

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          • #6
            You each must open up your own tIRA and Roth IRA. The Spousal IRA rules allow working spouses to contribute to a non-working spouse’s IRA. So you contribute to your own tIRA and also to her tIRA. Each of you would then convert your respective tIRAs to Roth. (Couples must file a joint return if the non-working spouse’s IRA contribution is based on the working spouse’s income).

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            • #7
              Originally posted by BruinBones View Post
              You each must open up your own tIRA and Roth IRA. The Spousal IRA rules allow working spouses to contribute to a non-working spouse’s IRA. So you contribute to your own tIRA and also to her tIRA. Each of you would then convert your respective tIRAs to Roth. (Couples must file a joint return if the non-working spouse’s IRA contribution is based on the working spouse’s income).
              No, here again semantics matter. The non-working spouse contributes to their own IRA based on the working spouse's available IRA compensation.

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              • #8
                This was helpful. Thank you all

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