Comments on: Roth IRA vs 401K: Which is Right for You?

By: Philip Taylor

Philip Taylor — Thu, 01 Jan 1970 00:00:00 +0000

I’m a big fan of using your work 401K. I used to try to max it out each year. If your 401K has a matching benefit then you should most definitely try to get started with that.

By: Mike

Mike — Thu, 01 Jan 1970 00:00:00 +0000

I don’t make much money right now since I’m a full time student, but my job offers a 401k..I also have a roth ira from before when I transferred funds from my 401k to my roth ira. Should I just stick with my roth ira? Or enroll into my new jobs 401k?

By: Scott Grinas

Scott Grinas — Thu, 01 Jan 1970 00:00:00 +0000

401k plans are great if you maximize your contributions and the same can be said for roth ira’s although I would agree that self directed roth ira and self directed 401k products seem to be even better for small business owners.

By: Dona Bellanger

Dona Bellanger — Thu, 01 Jan 1970 00:00:00 +0000

great post to share keep posting

By: Philip Taylor

Philip Taylor — Thu, 01 Jan 1970 00:00:00 +0000

I’m actually going through this process for myself right now. I’ll let you know what I find out. One thing I can say is that I wouldn’t let the payroll company lead me into anything. I’d go find the best solution myself independent of their help.

By: Philip Taylor

Philip Taylor — Thu, 01 Jan 1970 00:00:00 +0000

Hi Steve. The limit for 2011 is $16,500. There is no % limit. It’s a total dollar amount. Divide $16,500 by the number of paychecks you get each year. Then figure out what % that number is of your gross paycheck. Set your % at that level.

By: Steve

Steve — Thu, 01 Jan 1970 00:00:00 +0000

I am currently enrolling in my companies 401k. They match 100% up to the first 1%. Then, they match 50% on the next 5%. The total match is up to 6%, then.

However, I am trying to find out what the legal (IRS) limit is (in %) in order to get the total allowable tax deferral. I think it is 10%, but I am not sure. Whatever it is, I want to change my contribution to that limit so that I can take advantage of the tax deferral, even if it means I don’t get the match over the 6%.

Can you tell me 1) if this is a good strategy and 2) what that % limit is?

Thank you.

By: Harvey

Harvey — Thu, 01 Jan 1970 00:00:00 +0000

To answer your 1st question: no you can’t open a joint account. I tried earlier this year and was told and IRA was only for 1 person. Hence the I = Individual. That doesn’t stop you from opening 1 for each of you though. You’d still be saving 10k/yr max; it’ll just be split between 2 accounts.

By: me

me — Thu, 01 Jan 1970 00:00:00 +0000

thats an awesome picture

By: Philip Taylor

Philip Taylor — Thu, 01 Jan 1970 00:00:00 +0000

John. Honestly, I don't think you can go wrong either way. Many things will change between now and retirement. Just make sure she keeps contributing to something. Some considerations:1. The 401(k) to Rollover IRA and then converting to Roth will mean a big payout in taxes owed. Make sure you can handle the cash outlay.2. Moving to a Rollover IRA is usually a smart move because it typically gives you flexibility and lower costs.3. You could both diversify individually by having two accounts each: you could have the 401(k) and a Roth, and she could have the Rollover IRA and then start a separate Roth. Combined, you could both be contributing over $30K a year. That'd be awesome!