I'm starting a graduate program in 2017 where I'll get a stipend. I don't think I'll receive a W2 because I won't be working for the wages, so I don't think I can contribute to my IRAs while I'm in school. Obviously there is no 401K either, traditional or Roth.

Do I have any options for saving for retirement in a tax-advantaged way? I know I can just use a brokerage or savings account, but I'm talking about options where either the money is contributed pre-tax or the earnings aren't taxable, like a traditional or Roth IRA/401K.

Also I'm not worried about liquidity or anything like that, so the sources I find that say "don't save for retirement as a grad student because you'll need the money while you're in school" aren't relevant to my situation. I'm specifically asking about what vehicles are available to me for tax-advantaged retirement savings.


If you're single, the only solution I'm aware of, assuming you are truly getting a 1099-misc and not a W-2 (and don't have a W-2 option available, like TAing), is to save in a nondeductible account for now.

Then, when you later do have a job, use that nondeductible account (in part) to fund your retirement accounts. Particularly the first few years (if you're a "young" grad student in particular), you'll probably be low enough on the income side that you can fit this in - in particular if you've got a 401k or 403b plan at work; make your from-salary contributions there, and make deductible IRA or Roth IRA contributions from your in-school savings.

If you're not single, or even if you are single but have a child, you have a few other options.

Spouses who don't have earned income, but have a spouse who does, can set up a Spousal IRA. You can then, combined, save up to your spouse's total earned income (or the usual per-person maximums). So if you are married and your wife/husband works, you can essentially count his/her earned income towards your earned income.

Second, if you have a child, consider setting up a 529 plan for them. You're probably going to want to do this anyway, right? You can even do this for a niece or nephew, if you're feeling generous.

  • I'm in my mid 30's and married, so a spousal IRA may be the way to go. To clarify, this means that a) if I earn 0 and my wife earns 50K, she can contribute 5500 to her IRA and I can contribute 5500 to my spousal IRA, or b) we can contribute 5500 total between the two of us to each of our IRA's? Will the fact that I already have several pre-existing IRA's cause problems? Maybe I should ask this in a separate question. – Michael A Feb 26 '16 at 21:45
  • From what I can find, it looks like a) is correct (that the spouse can contribute 5500 to his/her account and 5500 to the spousal account). – Michael A Feb 26 '16 at 21:49
  • a) is correct indeed; you each can contribute up to the maximum. More specifically, she can contribute as she normally can, and you have a separate (but identical) limit under the Kay Bailey Hutchinson Spousal IRA act. (I suppose they're not guaranteed forever to be identical.) – Joe Feb 26 '16 at 21:51
  • Also note that in this case, you should be aware of potential limitations if she has a 401k and your income is above a certain level. – Joe Feb 26 '16 at 21:52
  • Good to know, thank you. Her income will be 50K or less while I'm in school, so I don't think we'll run into any income limits, but I'll look into that. – Michael A Feb 26 '16 at 22:12

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