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