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Subject:  Re: 401K max Roth IRA max $Next? Date:  12/21/1998  9:29 AM
Author:  TMFPixy Number:  7389 of 88498

Greetings, 2gynkv, and welcome. You asked:

<<My 401-K is getting the max contribution my company will allow. I have deducted 17% before tax and a 5% after-tax contribution. The after-tax part of the account is segrigated, and it's principal is available for withdrawl with no penalty because the tax has been paid allready. Result: add $8,000/yr for total of $50,000 12/98.

I am making my 98 and 99 Roth IRA max contribution on 1/4/99. Total: $4,000.

I have $7,000 left over I want to put in a tax deffered vehicle. Options I can think of include:

*Tradional IRA. Can you contribute to a Roth and a Trad Ira for the same tax year? total 98 IRA contribution= $2,000 (Roth)+ $2,000(trad)=$4,000. still need to find a place for the other 5k of 7k.>>

If these are your IRAs, then you cannot do that. Your total permitted contribution to all your IRAs may not exceed $2K in any year. You may contribute $1 to 2,000 IRA or $2K to one IRA, but the total cannot exceed $2K.

<<*Variable annuity. I know there is no contribution limit, at least for me at <$40,000/year. Can I find one that lets me choose individual stocks for my account to purchase? Any draw-backs to this aproach?>>

Individual stock selection/trades are not permitted within an annuity.

<<*Stocks. Buy stocks I intend to hold at least until retirement in 12 years at, age 50, to avoid tax. This offers low flexibility and i think I would still have to pay tax on the dividends.

Which one is best, or a combination of these 3, or some option I don't know yet?>>

"Best" is strictly up to you; however, if you wish to have a self-directed account within which you make your own trades in stocks, then using a $2K annual contribution to a Roth IRA plus a taxable account for the remaining money would seem IMHO the appropriate option.


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