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Something I just thought about in reading a recent post but not sure if there are any other options.

Consider the case of two people. One works for a company that offers a 401(k) plan and the other does not. For simplicity, assume both people qualify for a Roth IRA.

Employee one can max out the 401(k) and make a contribution to a Roth IRA in the full amount of $3000.

However, employee two can make a $3000 deductible contribution to a Trad. IRA but then cannot make any further contributions to any IRA, correct? If I am not mistaken, you are limited to a total of $3000.

Therefore, what other options are available to employee two to increase the deductible savings and be able to make a Roth contribution? If you are not offered a plan through your employer, are you limited to a total of $3000 in a combination of Trad. and/or Roth accounts?

Any suggestions, comments, etc are welcome. BTW, I currently fall into the situation of employee two and looking to maximize my retirement savings while getting the most bang for the buck so to speak.


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