Roth IRA if I have a 40l(k) at work?
When does it make sense to use Roth IRA. I already am participating to the maximum to my 401K. Does that maximum prevent me from purchasing a Roth IRA with my quarterly company bonus?
Terry Says
Yes, you can contribute to BOTH a 40l(k) and a Roth IRA in the same year -- if you meet the income limits restricting contributions to Roth IRAs. For 2017 here are the limits: The first column shows the income level at which the amount you can contribute starts phasing out. When your income reaches the level in the second column, you can no longer contribute to a Roth IRA.
Single, head of household, or married filing separately if you didn't live with your spouse during the year | $118,000 | $133,000 |
Married filing jointly or qualifying widow(er) | $186,000 | $196,000 |
Married filing separately if you lived with your spouse at any point during the year | $0 | $10,000 |