Can I contribute to a 401k and a Roth IRA?
In 2009, the maximum amount that can be contributed to a 401(k) plan is $16,500 if you are under the age of 50. If you are older than 50, you are allowed an additional $5,500 per year as a catch-up amount. It should be noted that not every employer will allow you to use a catch-up contribution. If you are over 50 and currently have a 401(k) plan with your employer, it is recommended you find out if you are allowed that extra amount. Financial advisors recommend that you contribute as much as you can afford into your 401(k) plan.These figures are for your contributions only. They do not include any contribution made to the account by your employer. The contribution limits for a 401(k) plan can change each year, so make sure you are always aware of what the limits are.The Roth IRA contribution limits are completely different from a 401(k). In fact, the limit is significantly less. Currently, in 2009, anyone under the age of 50 is allowed a maximum of $5,000 per year. There is again a catch-up amount for those who are over 50. This amount is $1,000, totalling $6,000 per year.Contributing to a 401(k) and a Roth IRA is AdvantageousIf you have a Roth IRA retirement account and have the option of signing up for a 401(k) plan in addition, it is highly suggested to do so. At first, this may seem like you are taking a huge chunk out of your pay. While it is recommended to contribute the maximum to both accounts, this is not a requirement. However, despite your earnings, you should make contributions to both accounts if you have that option. A 401(k) plan is a powerful tool.Pages: 1 [2] 3 4
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