Comments on: 401(k), Roth IRA, then Back at 401(k) http://thefinancebuff.com/2006/10/401k-roth-ira-then-back-at-401k.html like a friend telling you about money ... Thu, 19 Nov 2009 19:44:17 -0600 http://wordpress.org/?v=2.8 hourly 1 By: sewall http://thefinancebuff.com/2006/10/401k-roth-ira-then-back-at-401k.html/comment-page-1#comment-1704 sewall Thu, 12 Mar 2009 14:40:23 +0000 http://blog.thefinancebuff.com/?p=16#comment-1704 The IRA contribution limits rise over time. As of 2009 they're $5k per individual per year. There are other reasons not mentioned above to stuff as much in one's Roth as one can (after getting the company 401(k) match): (1) it is reasonable to expect all our tax rates to go up (US is taking on tremendous debt), thus, in general one should pay taxes now and not in retirement (the ordering of individual tax rates may, of course, be reversed); (2) There are no RMDs for Roths. You won't be forced to start taking your money out when you reach 70.5. You can leave it there until you need it; (3) You can withdrawal your contributions anytime without penalty. It isn't a great idea to go raiding your Roth. But, if you need to, you can do so without a penalty. This latter point makes it hard to justify not maxing out one's Roth. It takes special and generally rare circumstances for which it is not a good idea. The IRA contribution limits rise over time. As of 2009 they're $5k per individual per year.

There are other reasons not mentioned above to stuff as much in one's Roth as one can (after getting the company 401(k) match): (1) it is reasonable to expect all our tax rates to go up (US is taking on tremendous debt), thus, in general one should pay taxes now and not in retirement (the ordering of individual tax rates may, of course, be reversed); (2) There are no RMDs for Roths. You won't be forced to start taking your money out when you reach 70.5. You can leave it there until you need it; (3) You can withdrawal your contributions anytime without penalty. It isn't a great idea to go raiding your Roth. But, if you need to, you can do so without a penalty. This latter point makes it hard to justify not maxing out one's Roth. It takes special and generally rare circumstances for which it is not a good idea.

]]> By: goldi http://thefinancebuff.com/2006/10/401k-roth-ira-then-back-at-401k.html/comment-page-1#comment-362 goldi Mon, 31 Dec 2007 15:11:00 +0000 http://blog.thefinancebuff.com/?p=16#comment-362 There is a great book dedicated to this topic called "It's Your IRA". It is an excellent resource for those wanting to learn more about investing in Roth and Traditional IRAs. It is available through Amazon or you can go to ItsYourIRA.com for more details. It is definitely worth a look. There is a great book dedicated to this topic called "It's Your IRA". It is an excellent resource for those wanting to learn more about investing in Roth and Traditional IRAs. It is available through Amazon or you can go to ItsYourIRA.com for more details. It is definitely worth a look.

]]> By: TFB http://thefinancebuff.com/2006/10/401k-roth-ira-then-back-at-401k.html/comment-page-1#comment-8 TFB Tue, 31 Oct 2006 15:51:00 +0000 http://blog.thefinancebuff.com/?p=16#comment-8 If you don't have access to a 401k/403b type plan, then you have to invest in a regular mutual fund account, after you maxed out the 4k for IRA, either Traditional or Roth depending on your tax bracket -- high tax bracket traditional, low tax bracket Roth. If you don't have access to a 401k/403b type plan, then you have to invest in a regular mutual fund account, after you maxed out the 4k for IRA, either Traditional or Roth depending on your tax bracket — high tax bracket traditional, low tax bracket Roth.

]]> By: Dogberry http://thefinancebuff.com/2006/10/401k-roth-ira-then-back-at-401k.html/comment-page-1#comment-6 Dogberry Tue, 31 Oct 2006 06:09:00 +0000 http://blog.thefinancebuff.com/?p=16#comment-6 I could not figure out what they meant by putting more in a traditional IRA either. <br/><br/>A question that I am considering. If you don't have access to a 401k then what should you do after you have maxed out the 4k of a Roth IRA?<br/><br/>Dogberry<br/><a HREF="http://money-and-investing.dogberrypatch.com/" REL="nofollow">Money & Investing Dogberry Patch</a> I could not figure out what they meant by putting more in a traditional IRA either.

A question that I am considering. If you don't have access to a 401k then what should you do after you have maxed out the 4k of a Roth IRA?

Dogberry
Money & Investing Dogberry Patch

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