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Question for the Money Doctors

Question submitted on Apr 7, 2012.

Question

ROTH IRA"S
HAVE ONE A WORK UNDER THE 401k PLAN
HAVE ONE REGULAR WITH MW
JUST OPENED ONE WITH SCOTTRADE
IS THIS OK
CAN EACH BE MAX''D OUT KNOW ABOUT THE WORK 401k PLAN

Answer

Your work 401k plan with the Roth feature will have it''s own separate limits from a personal Roth IRA.  These limits for 2012 are $17,000 and an additional $5,500 if you are over age 50.

You can have multiple Roth IRAs and your 2012 contributions are limited to $5,000 (or $6,000 if over age 50) per year per person, regardless of the number of accounts.  Keep in mind also that you have to have enough "earned income" to be eligible to contribute to the Roth IRA, meaning your W2 or small business income (I.e. a Schedule C or K-1 subject to SE tax) must exceed the contribution limit.  Otherwise, your contribution is limited to the amount of your earned income.


For additional information visit http://www.360financialliteracy.org/