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Posted: 9/1/2010 9:52:35 AM EDT
[Last Edit: 9/1/2010 9:56:58 AM EDT by opticalc]
I'd like to contribute to an IRA where all my contributions are post tax, so when I retire all that $ in the IRA is already tax free. But apparently I make too much $ to be able to use this program. Also, apparently I cannot even contribute into a regular IRA and deduct that from my wages as a tax deduction because of my income.

So should I now just give up on the IRAs and just max out 401k contributions beyond the employer match % so as to get more tax break?

I just changed jobs so have to roll over an old 401k. Should I just put it into my current employers 401k? seeing that I cannot get the tax benefits of either IRA I dont see any other reason to not put it in my new 401k.
Link Posted: 9/1/2010 11:40:44 AM EDT
if you're over the salary limit to contribute then yes max out the 401K to $15,500 I believe the cap is right now. As for rolling over your other 401K , that's up to you. I would say it depends what funds the new company has in their 401 portfolio. You might be able to roll the old 401 into an IRA roll over and just contribute to the new 401 for diversity. Contact a financial adviser for better info.
Link Posted: 9/1/2010 2:03:11 PM EDT
I believe you can still contribute to a regular IRA, you just can't deduct it
They still grow tax free though. (although you pay tax on both ends)

shit, just pay your tax every year and quit whining, there's nothing really wrong with being liquid.

Link Posted: 9/1/2010 3:21:55 PM EDT
Originally Posted By SharpCharge:
yes max out the 401K to $15,500 I believe the cap is right now.


$16,500 it should be.
Link Posted: 9/1/2010 4:33:43 PM EDT
You may be making too much money to max out a 401K also. You might want to talk to HR at the new company to find out.
Link Posted: 9/8/2010 8:44:38 AM EDT
Roll your 401k into a personal IRA. That always gives YOU control of the investments rather than your employer. If you or your spouse are served by a 401k at work, you can not contribute to a regular IRA and get any tax benefit. There are income limits on contributing to a Roth. If your employer is matching, Contributing the maximum to the 401k is the likely best investment.

All of the rules can be found a IRS.GOV
Link Posted: 9/8/2010 9:48:37 AM EDT
Originally Posted By Averagebear:
Roll your 401k into a personal IRA. That always gives YOU control of the investments rather than your employer. If you or your spouse are served by a 401k at work, you can not contribute to a regular IRA and get any tax benefit. There are income limits on contributing to a Roth. If your employer is matching, Contributing the maximum to the 401k is the likely best investment.

All of the rules can be found a IRS.GOV


well i did find out my company's 401k options do include a roth401k which is post tax. So when I retire I will also be able to have a completely tax-free retirement withdrawal as well as the regular taxed 401k withdrawal. The only thing is that the fed limit of 16.5K or whatever it is limits the sum of both contributions.

So now my question is will my completely tax-free (completely tax free then b/c I am being taxed on it now) roth401k disbursement affect the rate I am taxed on my regular 401k disbursement?

Link Posted: 9/8/2010 9:57:10 AM EDT
Make an after-tax regular IRA contribution and then convert it to a Roth. They took the income limit off of the conversions. Wife and I did it earlier this year.
Link Posted: 9/8/2010 10:25:26 AM EDT
Originally Posted By InheritedAnArsenal:
Make an after-tax regular IRA contribution and then convert it to a Roth. They took the income limit off of the conversions. Wife and I did it earlier this year.


I did set up an additional IRA, but I cannot deduct it from taxes, also its taxed upon retirement/disbursement. But as far as converting it to roth, dont they get you with penalties then? or do they make you pay taxes out of pocket instead of taking the taxes from the IRA?
Link Posted: 9/10/2010 6:59:21 PM EDT
Starting this year you can convert a traditional IRA to a Roth, regardless of how much you make. You first have to roll your 401 to a traditional and then convert it. You also have the choice on whether you pay the taxes for 2010 (Apil 15, 2011) or split them equally (50%) between 2011 & 2012. I would wait to see what the new congress says about income taxes after the election in Nov. before making that decision. Once you convert the money, you have to leave it alone for 5 years or you will incur the 10% penalty. After that the amount that you convert will be available for withdrawal, just like a regular contribution (any growth would be subject to early withdrawal rules).
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