Can You Have Roth IRA And 401K?

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One response to “Can You Have Roth IRA And 401K?”

1. 

   October 25, 2014

   Karl Renwanz

   Yes, you can have a Roth IRA and a 401k. Your employer needs to offer a 401k plan. Having both a Roth IRA and 401k can be a great strategy for increasing your retirement income. If your employer is providing a match for your 401k, that’s even better.

   A Roth IRA (Individual Retirement Arrangement) is a retirement plan that is generally not taxed provided certain conditions are met. If you satisfy the requirements, qualified distributions are tax free. Here are the basic rules of a Roth IRA:

   No age restrictions for contribution or distribution
   Maximum income allowed for 2014 to participate is $129,000 single and the head of
   household, $191,000 joint filers
   Earned income must be or greater than your Roth IRA contributions
   Tax free growth – you pay no taxes when you make qualified withdrawals after age 59 ½
   and your account has been open at least five years
   Maximum contribution $5500 ($6500 if you are 50 or older)

   You should consult with a qualified financial professional when considering financial products and strategies for retirement income.