Summary: If you've maxed out your 401K retirement plan at work, you have a few options for opening an IRA depending on your income level. You're only allowed to contribute to a conventional IRA if you have a low income. To open and max out a Roth IRA for retirement, your income has to be under $95,000 if you're single, $160,000 if you're married.
Q: I am retired from a major computer company and am still working their for an outsourcing company. I am maxed out in my 401K and am not sure if I'm contributing to a 401K if I can buy either a Roth IRA or a regular IRA.
A: If you're contributing to a 401(k), you can't also contribute to a conventional IRA unless you have a low income. You can, however, contribute to a Roth IRA if your income is $95,000 or less if you're single or $160,000 or less if you're married. This year, the amount you can contribute to a Roth IRA rose to $3,000, or $3,500 (per person) if you're over 50. If you're not contributing to the 401(k) because you're not considered a full-time employee, you may be able to open up a Keogh plan. This would enable you to put away a significant chunk of your income.
Q: I enjoy listening to your advice on the Clark Howard show and have a quick question that is not Real Estate related but was wondering if you could answer. I currently max out my 401K ($11,000 for 2002) and would like to know if I can also max out a Roth IRA ($3000).
A: You can, if your income falls below $95,000 as a single person or $150,000 if you're married. The ability to contribute to a Roth diminishes between $150,000 to $160,000 in income if you're married.
Check out www.taxplanet.com for details.
Jan. 1, 2005
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(View All Topics)401k IRA IRS Roth IRA credit down payment ilyce glink income tax investment mortgage personal finance advice real estate retirement save money taxes
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