For the past 4 years I was self-employed and contributed $5000 annually to a traditional IRA (before-tax). Now I work at a company that has a 401(k) plan and matches 3% (vested over 5 years). So my questions are, can I contribute to BOTH? And what are the limits? My w-2 will have the “ret” box checked on it, so I might get hit with an over-contribution if I contribute too much. But right now I am looking to save for retirement and this is a good year for me to stick as much away as possible.
4 comments so far...
you can contribute to both but your income limit may have some restriction on how much is deductible
to be safe the Roth would be the better since no tax consequence happens at contribution or distribution
and any money I had in mutuals lost big last year I never, never like mutuals
Yes you can contribute to both. Limits are $5,000.00 for the IRA and $16,500.00 for the 401(k) for people up to age 49 in 2009. If 50 yrs old or older, limits are $6,000.00 for the IRA and $22,500.00 for 401(k). Good luck
See IRS publication 590 for the limits.
For 2009, singles were phased out starting at $53K of income.
Money to an IRA will be after tax as you have a 401K. The amount you contribute to the 401K does not matter. Contributing anything means that you cannot fund an IRA pretax. If you are eligible, look into a Roth IRA.
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