Can I Contribute To Both A 401k And An IRA ?
If you want to know whether you can contribute to both a 401k and an IRA, the answer is yes. However, the only hitch is that if a person contributes to a 401k retirement plan, he may not able to get full tax deduction on the contribution made to the IRA. |
Sponsored Links :
|
In 2009, the contribution limit to a 401k plan is $16,500, which is a thousand dollar more than 2008. For people who are 50 years and older, there is a catch up where they can contribute another $5,500.
The contribution limit for an IRA in 2009 is $5,000 for individuals less than 50 years. Those who are 50 years and older can contribute $6,000 which is inclusive of the $1,000 catch up contribution. A married couple can contribute up to $10,000 if less than 50 years, $12,000 if 50 years and above.
Another thing is that you can only get a full deduction for your IRA contribution if your modified adjusted gross income is less than $55,000 in 2009. Anything above this and up to $64,999, there is partial deduction. If you are married and filing jointly, your modified gross adjusted income should not exceed $89,000 for full deduction and it should be between $89,001 and $108,999 for partial deduction.
Therefore, it means that you can make contributions to both 401k and an IRA as long as you have earned it. Even if you are ineligible to deduct the contribution to an IRA in your tax return, you should not let that deter you. You should make it a point to contribute to both 401k and IRA, to which you can make non-deductible contribution and allow your money to grow tax deferred.
More Articles :
|
