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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 265718  
Subject: Re: Buying Stock - Brokerage or Roth? Date: 11/26/2013 9:59 PM
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Per IRS Publication 590, the contribution limit is--

For 2012, the most that can be contributed to your traditional IRA generally is the smaller of the following amounts:

$5,000 ($6,000 if you are age 50 or older), or

Your taxable compensation (defined earlier) for the year.

So in 30 yrs, the max you can contribute is $150K. You need substantial investment returns to get to a decent retirement sum from there.

A 401k pretax contributions allows about 3 times as much and often even more with after tax contributions.

So fund your Roth to the max, and your 401k to the max and then when you change jobs or otherwise get a chance roll your 401k balance over to an IRA and do a Roth conversion (if tax rates are acceptable).

For many, this is the easiest way to get to a balance large enough to fund early retirement.
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