Need Some Advice on IRAs

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SilasDoGood
Posts: 2
Joined: Fri Jul 26, 2013 8:45 am

Need Some Advice on IRAs

Postby SilasDoGood » Fri Jul 26, 2013 8:56 am

My wife and I both work full time and do not receive a 401k from our employers. Combined we bring in $164,000.00 a year gross salary. Can
we invest in a Traditional IRA and a Roth? What are the tax implications?

Thanks for your help!

Johm221122
Posts: 4880
Joined: Fri May 13, 2011 6:27 pm

Re: Need Some Advice on IRAs

Postby Johm221122 » Fri Jul 26, 2013 7:16 pm

SilasDoGood wrote:My wife and I both work full time and do not receive a 401k from our employers. Combined we bring in $164,000.00 a year gross salary. Can
we invest in a Traditional IRA and a Roth? What are the tax implications?

Thanks for your help!

Yes you can invest in both, but limit is $5,500 a person unless over 50
Traditional ira taxes are when you withdraw and Roth you pay taxes now.The biggest question is what do you see your retirement tax rate being?
Welcome to forum
John

kaneohe
Posts: 3062
Joined: Mon Sep 22, 2008 12:38 pm

Re: Need Some Advice on IRAs

Postby kaneohe » Fri Jul 26, 2013 7:59 pm

Typically you get a full deduction for your TIRA contributions if you don't have a retirement plan at work.
http://www.irs.gov/Retirement-Plans/2013-IRA-Deduction-Limits-Effect-of-Modified-AGI-on-Deduction-if-You-Are-NOT-Covered-by-a-Retirement-Plan-at-Work

You can each have both a TIRA and a Roth but the sum of your contributions to both is limited to the same amount as if you only contributed to one. Typically
contributing to one type will be more favorable than the other depending on your tax bracket now vs your tax bracket when you withdraw funds in retirement.
At your income level, typically that would be the TIRA.

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joe8d
Posts: 3852
Joined: Tue Feb 20, 2007 8:27 pm
Location: Buffalo,NY

Re: Need Some Advice on IRAs

Postby joe8d » Fri Jul 26, 2013 9:13 pm

SilasDoGood wrote:My wife and I both work full time and do not receive a 401k from our employers. Combined we bring in $164,000.00 a year gross salary. Can
we invest in a Traditional IRA and a Roth? What are the tax implications?

Thanks for your help!


Given your income level and the contribution limits on an IRA, i would go 100% T-IRA.You would be sheltering the highest 7% of your income.
All the Best, | Joe


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