Questions-

1. Can you have an 401K Roth (from job) and a regular individual Roth account same time and able contribute same year?

2. Or will you be penalized in some way?

Thanks for replies

Your employer sponsored plan and your IRA have nothing to do with one another, except that the deductibility of your traditional IRA contributions will depend on whether you participate in your employer sponsored plan or not and your AGI.

Otherwise, to contribute to your Roth, the IRS only requires that you have at least the amount of your contribution in earned income and that you don't exceed the AGI limitation for a Roth. What you have or don't have as an employer sponsored retirement plan is not an issue.

BruceM

1. Can you have an 401K Roth (from job) and a regular individual Roth account same time and able contribute same year?

Provided you income falls below the Roth contribution limits, you can contribute to both. Scroll down the link to Table 2-1
http://www.irs.gov/publications/p590/ch02.html#d0e9323

2. Or will you be penalized in some way?

Yes, if you over contribute--
http://www.irs.gov/publications/p590/ch02.html#d0e10172




Hohum

except that the deductibility of your traditional IRA contributions will depend on whether you participate in your employer sponsored plan or not

Just a quick correction: it will depend on whether you are *eligible* to participate in your employer sponsored plan, not whether you actually do. Choosing not to participate does not help your Trad IRA eligibility.

While the replies you have received are correct, they may be confusing you with differing terminology.

A Roth 401K is subject to the 401K contribution annual limits. Contributions within the 401K are called designated Roth contributions. You can split your total 401K contribution limits between pretax 401K or Roth 401K contributions. The designated Roth 401K contributions will be taxable income but all future returns upon distribution will be non-taxable.

Are there any limits as to how much I may contribute to my designated Roth account?

Yes, the combined amount contributed to all designated Roth accounts and traditional, pre-tax accounts in any one year for any individual is limited by the 402(g) limit - $15,000 for 2006 ($15,500 in 2007 plus an additional $5,000 in catch-up contributions if age 50 or older).

The Roth IRA contribution is a separate limit and does not consider any amount designated as Roth 401K within your employer plan. Roth IRA qualifications do apply as the previous responses have indicated.

This additional IRS link will provide some Q&A information regarding your Roth 401K.
http://www.irs.gov/retirement/article/0,,id=152956,00.html#5

Deltaone
Small correction.

With defined contribution plans, an 'active participant' is one who receives into their own account in a given year, at least one of the following:

1. contributions are made to the employee's account, whether from salary deferral or employer contribution
2. receives allocations from reallocated plan forfeitures

Employees who do not meet one of the above will not be considered to be active participant for that year.

OTOH, employees who are eligible for a defined benefit plan but do not participate WILL be considered active plan participants

Take a look at p. 14 of Pub 590 at

http://www.irs.gov/pub/irs-pdf/p590.pdf

or for a little more user friendly format, look at Investopedia's definitions at

http://www.investopedia.com/articles/retirement/05/032305.asp

BruceM