Jan
27
Is there a maximum contribution amount for employer-sponsored 401K plans? Does your total combined IRA contribution for ’08 (that’s Roth IRA plus 401K) have to be $5,000 or less?
Roth IRA, Traditional IRA, 401K
IRA Questions and Answers
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2 comments so far...
It applies only to Roth or Traditional IRAs. A 401k has a maximum of $15,500 for 2008. If you have a 401k, you can’t have a Traditional IRA but you can contribute fully to a Roth IRA.
That means you can contribute $15,500 to a 401k and $5,000 to a Roth IRA for 2008.
As I read it, for MOST PEOPLE the Roth IRA and 401k are independently judged, and contributing up to the limit on a 401k does not diminish the amount one is allowed to contribute to a Roth. One exception is if you made a LOT of money in 2008 – you can read the instructions in the IRA publication 590 (get it from http://www.irs.gov) to see if this is the case with you. If you made less than, like $150,000 last year, I wouldn’t worry about that restriction.
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