Spouses with individual Roth IRAs

Office Hours
#1

Hey PFC!

My wife and I have been doing the course and havebeen following the Instagram for a long time as well. It’s been a great journey but there’s been a burning question we have had and haven’t found a good answer.

We both have our own individual Roth IRAs that we are setting aside income to invest in every month. But we aren’t sure how we should be splitting it.

Hypothetically, if we had $500 a month set aside for the IRA, should we:

  1. Put $250 in each one?
  2. Put $500 in one and switch which one gets it each month?
  3. Since we can only put in $6,000 a year, should we just invest all $500 into one of them until we could afford to put more than that in our accounts? Basically max out the $6000 in one and focus there until we could afford to invest in both simultaneously.

We haven’t found any resource that would directly compare these outcomes so we really don’t know if there is any benefit to one strategy over the other. Any help would be appreciated!

#2

Hi Jared!

Edit: We ran out of time for this question tonight, so we’ll answer it next Wednesday on 6/23/2021!

I’ll cover this in tonight’s office hours (6/23/2021) with the recording available afterwards on the course site!

If you’re not signed up for office hours, you can sign up here.

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#3

Hey Jeremy, we watched the 6/23 Office Hours and didn’t see our question answered. Not sure if we just missed it or it was answered on another week since we’ve been travelling and haven’t been able to join the last couple office hours.

#4

Hi Jared!

Vivi and I just realized this question got lost in the shuffle when I went out of town a few weeks ago, so we never actually answered it in office hours! If you’re still interested, we can discuss it tomorrow.

Also, if you just want the answer: It doesn’t matter. $500 all in one, or $250 each will all grow at the same total pace (assuming you’re investing in the same thing, no transaction fees, etc).

So the math behind it doesn’t suggest you should do one or the other so it really comes down to a shared decision with you and your wife. I’d personally split it 50/50 with a goal of maxing out both! :slight_smile:

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#5

That’s perfect! Thanks for the insight! We’re hoping that we can eventually afford to max out our contributions to both accounts, but it’s good to know we aren’t losing out on money by splitting it instead of maxing out one account.

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