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401k and IRA question
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Mac Enthusiast
Join Date: Oct 2002
Location: Seattle
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Offline
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Is there any benefit to starting a new 401k plan when your employer offers no match, and you already have a signigicant investment in your rollover IRA?
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PowerMac G4 Gigabit 1.2GHz, 896MB, 2x 80GB WD SE, Pioneer 107, Radeon 9000 Pro 128MB
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Addicted to MacNN
Join Date: May 2001
Location: Cupertino, CA
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Can you continue to make contributions into a rollover IRA? That'd be one consideration. Generally you can contribute more per year to a 401k.
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Mac Enthusiast
Join Date: Oct 2002
Location: Seattle
Status:
Offline
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I don't think I can make pre-tax contributions to my IRA. Right?
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PowerMac G4 Gigabit 1.2GHz, 896MB, 2x 80GB WD SE, Pioneer 107, Radeon 9000 Pro 128MB
Macintosh TV
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Mac Elite
Join Date: Nov 2002
Location: Ellicott City, MD
Status:
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Unless I'm mistaken... your IRA is funded by taxed income. 401K is pre tax (actually tax deferred). Thus, 401K may end up helping you by lowering your taxable income.
I do believe, however, you are allowed to put a certain amount into an IRA and deduct that (like 3K?)... so maybe you'd want to do both...
But definitely put money away in the 401K if possible - its amazing how fast it accumulates over time. I think the last time I saw that graph.... a 29 year old had to put twice as much than a 21 year old in order to come out even at 65 - IIRC.
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