No. of Recommendations: 0
"Now that I'm seeing that there are limits on paying into an IRA, maybe that wouldn't work, at least when we hit the limit for the year."

Sorry I didn't quite understand what you mean here - are you talking about the limit on contributions, the time limit on contributing by 4/15, or the limit on contributing to a deductible or non-deductible IRA based on income limits and whether you're covered by a retirement plan at work...............

I was refering to the limit on contribution amounts for the year. Isn't there a cap of $3,000 this year and $4,000 next year? Or is that just the amount that can qualify as tax-deductible? If that is the cap, and we wanted to put more away for retirement, then we need to start a regular investment account, right? I guess I was hoping for a one account scenario, but it looks like that won't work.

You don't allocate by percentage in an IRA the way you do for a 401K. An IRA is a totally self-directed account, like a regular investment account at a brokerage, or mutual fund company. Most have a money market account tied to the trading account. So, once you open it, you send them the contribution, and they will happily keep it in whatever money market type account they offer - and pay you a paltry .0075 or 1% annual interest - unless you direct them to buy a mutual fund or a stock with your money.

Thank you for clarifying this.

Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.