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|Subject: Re: taxable IRA after maxing 403b||Date: 1/11/2004 10:51 PM|
|Author: buzman||Number: 38477 of 77092|
I plan to contribute the max to my 403b this year but can afford to save more. Very good
I read that you can still contribute further to a traditional IRA, but this contribution will be taxable. If so, in what sense is this an IRA? No you misunderstood. You can contribute to a traditonal IRA but the contributions are not deductible. Furthermore you can contribute to a ROTH IRA, subject to AGI limitations, however the Roth contributions are not deductible, either.
How is this different than just setting up a taxable investment account? Big difference, IRA contributions grow tax-deferred so you don't pay taxes each year. The taxable investment account would be subject to LTCG tax on assets held greater than one year but IRA distributions are taxed as OI.
The main advantage of a retirement account is that the "withdrawal restrictions" tend to act as a deterrent to one blowing the money on bull$it.
THIS IS NOT INTENDED AS FINANCIAL ADVICE. CONSULT WITH A PROFESSIONAL BEFORE MAKING ANY DECISIONS REGARDING YOUR FINANCES.
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