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URL:  http://boards.fool.com/jimmy83-wrote-im-still-a-little-confused-i-10361280.aspx

Subject:  Re: IRA Limitations w/401(K) Date:  10/10/1998  10:14 AM
Author:  TMFPixy Number:  5967 of 78166

Jimmy83 wrote:

I'm still a little confused. I currently participate in my company's 401(K) plan and have approx. $150,000 accumulated. I have a separate investment account with Smith Barney with approx. $40,000 in it. Would there be any advantages in opeing an IRA or ROTH? I realize with the IRA I won't be able to tax defer the $2000/yr from my taxes. Should I open a ROTH? I've also recently opened an account with Datek and sold one of my mutual funds from Smith Barney ($4000) to start investing Foolishly. Any suggestions for managing my money better? Also, I'm almost 42 and would like to retire (more or less) in about 15 years.

If you have the funds to do so and assuming the deposit would be nondeductible anyway, then the Roth IRA makes eminent sense. Dollar for dollar it would beat a traditional nondeductible IRA every time because, unlike the traditional IRA, all withdrawals from a Roth IRA ultimately return to you tax-free. Gains in the traditional IRA would be taxed at ordinary rates when taken.

As to what you should do about "managing your money your money better," I assume you're asking how it can be invested. If so, be aware that in Fooldom we believe you must take full responsibility for that yourself. From your post, I gather you're both new to Fooldom and to investing. That's great on both counts! You have wandered into a forum that believes you, as an individual, can do far better for yourself than most professional money managers. Provided, that is, you take some time to learn a few basic investment concepts and do some self-examination to see where you fit on the risk tolerance scale. Therefore, why not take some time now -- not later -- to be sure about what you want to do. Start first by reading The 13 Steps to Investing Foolishly, which you can access from the main, opening screen to The Motley Fool. They will suggest some important things you should consider. Then I suggest you toddle over to your local library, discount bookstore, or even here in the Fool Mart, and pick up some easily read, easily understood, inexpensive texts that will thoroughly explain how to invest in stocks using some simple systems that will take but an hour per year of your time (if you're slow) yet produce returns that put the majority of professional money managers to shame. I suggest and commend the following to you: "Beating the Dow" by O'Higgins; "The Dividend Investor" by Petty and Knowles; "The Motley Fool Investment Guide" by the Gardner brothers; "One Up on Wall Street