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Can I start a Roth IRA before residency begins?

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  • Can I start a Roth IRA before residency begins?

    Hello everyone. I'm very excited to start my first grown-up job (IM residency) in about 4 months. My wife and I have a good emergency fund already in place and just received a generous tax return thanks to my wife's work last year. We are in the position (unique to us) of having enough funds for the immediate future, and I was thinking of entering this stock market that everyone is always talking about.

    My issue is that I have no income from 2015, and won't start having income in 2016 until my residency starts. Can I open the Roth IRA now and contribute for the 2016 year given that I will have income later?

    Alternately, I think I could open a Roth IRA in my wife's name under her 2015 earnings (as it is not yet April 18)? The issue with this plan is that she is transitioning to stay-at-home parenthood and will likely not have income for the next decade+.

    I was thinking that Vanguard Target Retirement 2060 would be a good aggressive plan (and it has a $1000 minimum which is all we have to start with).


    Any insights are deeply appreciated.

  • #2
    If your wife had income for 2015, you are able to open a Roth IRA for her before tax day this year. You additionally can open up a spousal Roth IRA for 2015 for yourself and contribute $5,500 for yourself (presuming her earned income was at least $11,000 last year).

    You would also be able to contribute to the 2016 amount based on income you plan to earn for 2016 up to tax day in 2017. I would not use up your 2016 space until you either max out your 2015 or it's after tax day and you can no longer contribute for 2015.


    • #3
      You and your wife have until 4/18/16 to each contribute a full $5,500 to Roth IRAs for 2015 as long as your AGI is not over $184k (obviously, that's not the case, but for others reading). Yours will be spousal and based upon your wife's income. She must have had at least $11,000 in earned income for you to fully fund 2 IRAs for the max, however.

      I fully agree with shantster that you should fill your 2015 bucket as much as possible before starting on the 2016 bucket. And yes, you can start funding for 2016 before you have any earned income for the year. Recommend you start as soon as possible on your 2016 Roth(s) and put that money to work for you rather than waiting until next year, if possible.
      My passion is protecting clients and others from predatory and ignorant advisors 270-247-6087 for CPA clients (we are Flat Fee for both CPA & Fee-Only Financial Planning)
      Johanna Fox, CPA, CFP is affiliated with Wrenne Financial for financial planning clients


      • #4
        WCICON24 EarlyBird
        Thanks shantster and jfox! I just started my wife's account. This is exciting.