Contributing to both a Roth 401K and a Roth IRA
Contributing to both a Roth 401K and a Roth IRA
Question: can you contribute maximum to a Roth 401K (16,500) and a Roth IRA (5,000)?
Re: Contributing to both a Roth 401K and a Roth IRA
The limits for a 401k are separate from the limits for a Roth IRA.
So you can contribute $5k to a Roth IRA, and $17k (the max for 2012) to a 401k -- and within the 401k it can be either Roth or traditional contributions. Just not more than 17k overall in the 401k.
So you can contribute $5k to a Roth IRA, and $17k (the max for 2012) to a 401k -- and within the 401k it can be either Roth or traditional contributions. Just not more than 17k overall in the 401k.
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Re: Contributing to both a Roth 401K and a Roth IRA
Not more than 17k for elective deferrals + designated Roth, when under 50 years old. You can also make after-tax non-Roth contributions. The total limit is 50k for all contributions, except catch-up.drh wrote:The limits for a 401k are separate from the limits for a Roth IRA.
So you can contribute $5k to a Roth IRA, and $17k (the max for 2012) to a 401k -- and within the 401k it can be either Roth or traditional contributions. Just not more than 17k overall in the 401k.
Brian
Re: Contributing to both a Roth 401K and a Roth IRA
You can do it, but it is probably not a good idea to make all of your contributions Roth unless you are in the 10% tax bracket (which would probably exclude most from being able to contribute $22k). The link below may be helpful.
http://thefinancebuff.com/case-against-roth-401k.html
http://thefinancebuff.com/case-against-roth-401k.html
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Re: Contributing to both a Roth 401K and a Roth IRA
With Roth's - it's the projected tax rate in retirement not the CURRENT rate that is important.retiredjg wrote:You can do it, but it is probably not a good idea to make all of your contributions Roth unless you are in the 10% tax bracket (which would probably exclude most from being able to contribute $22k). The link below may be helpful.
http://thefinancebuff.com/case-against-roth-401k.html
Edit: Nice article by the way... agree it's well worth the read.
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