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If I participate in a 401-k can I still fund a Roth IRA?

I would like to open a new Roth IRA but am unsure of the limitations based on having a 401-k and tax implications.

asked by mwgibson (14)

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Tags:  investing  taxes

answers

Yes, you may fund a Roth IRA while participating in a 401k plan. As long as you earn $105,000 or less in 2009, you may invest up to $5,000 in a Roth IRA. However, if you're 50 or older you may add up to $6,000 to your account each year.

7 votes

You can still contribute to the Roth IRA, but you are limited in how much money you can contribute annually. You can contribute up to $5,000 if your under the age of 50. Over 50 you can make "catch-up" deposits of an additional $1,000.

6 votes

The 401-K is through your job. The IRA is a personal account. It is possible and necessary to have both. If you lose your job without being vested, then you lose your employer contributions, but the IRA is yours until you close it.

5 votes

Yes, you can contribute to both. A 401K is limited to 20% of your income up to $16500. A Roth IRA contribution is limited to $5000. You are allowed to contribute the maximum to both if your income is under $110000 as an individual and $150000 as a family.

4 votes

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