I have a 401K through my job, do I need an IRA as well?
How do I decide?
Answers | 10
Assuming you do have cash left over, the answer to your question is YES. You can contribute to a Roth IRA, which is funded with after tax dollars and grows tax-free.
$commenter.renderDisplayableName() | 09.27.20 @ 16:45
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If you are young and qualify to contribute to a Roth IRA, you might consider doing so after you contribute the maximum amount to get any employer-matching in your 401(k).
Even if you are older, it might make sense to do the Roth. Having both pre-tax and post-tax money in retirement accounts gives you better flexibility with income in retirement. With the Roth IRA, you can take money out without increasing your tax bracket.
A financial adviser can help you decide what is going to work best in your personal situation.
$commenter.renderDisplayableName() | 09.27.20 @ 16:45
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$commenter.renderDisplayableName() | 09.27.20 @ 16:45
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$commenter.renderDisplayableName() | 09.27.20 @ 16:45
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Consider ROTH IRA, or another tax free vehicle Whole life or Variable Universal Life.
Michael Keeler
CFP®, CLTC in Las Vegas, NV | 03.05.15 @ 23:49
This isn't true, Arin. A regular IRA is always permitted by the IRS. It just may not be deductible. Deductibility is based on income limits of $98,000 joint or $61,000 if single.
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$commenter.renderDisplayableName() | 09.27.20 @ 16:45
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$commenter.renderDisplayableName() | 09.27.20 @ 16:45
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MoneyTips Writing Staff
Financial Adviser in Los Angeles, CA | 03.31.15 @ 17:37
Jay, you may want to ask this as a new question, so that professionals will see it and be able to respond to it.
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Phillip Christenson
CFA in Plymouth, MN | 07.28.15 @ 19:05
Hi Jay, no you cannot take the deduction for your son's IRA. He would claim that on his own tax return even if you claim him as a dependent. You should still be able to contribute to an IRA if you are able to reduce your gross income through deductions, i.e. IRA eligibility is based on MAGI (Modified Adjusted Gross Income). You should also consider a Roth IRA as well.
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$commenter.renderDisplayableName() | 09.27.20 @ 16:45
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$commenter.renderDisplayableName() | 09.27.20 @ 16:45
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$commenter.renderDisplayableName() | 09.27.20 @ 16:45
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$commenter.renderDisplayableName() | 09.27.20 @ 16:45
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