I've just finished an article about 401(k) plans. The author indicated 10% of the base salary should be used to fund the plan (I'm assuming he means max funding). I'm a public school employee (20 years until retirement); therefore, I have no 401(k). I do, however, have a state pension plan, a section 457 plan (similar to 403b for state/municipal employees), and an IRA. Despite not having a 401(k), I'm trying to make the article applicable to my situation. My question is: should I include the money going into the state retirement plan as I calculate my total percentage dedicated to retirement, or should I calculate the percentage using only the 457 plan and IRA?

Thanks in advance for your advice.
Doug

Hi Doug,

Yes, he is right 10% of your weekly or monthly

payment.

Check with your human resource department for

more information on what you want to do.

Before you jump into your 401k I enclosed a

good site for you:

http://www2.dol.gov/dol/pwba/public/pubs/401kfe~1.htm

and for more info. go to this board they might have

an answer for you: Foolish 401Ks

I hope this helps?

Good Luck

Doug,
Is your state retirement plan in lieu of paying into Social Security? If so I think the 10% is supposed to be figured on the other things you have. I was interested to see that you have an IRA, I had been told that since I had teacher retirement and a 403b available to me I could not have an IRA. Thanks for the info, I guess I had better do some more checking.

Is your state retirement plan in lieu of paying into Social Security?

No, it is not.


I had been told that since I had teacher retirement and a 403b available to me I could not have an IRA

As to the Roth IRA, I've had it for two years, and I've never been told I could not have one. Maybe someone here can comment on this.

Thanks
Doug

I had been told that since I had teacher retirement and a 403b available to me I could not have an IRA

As to the Roth IRA, I've had it for two years, and I've never been told I could not have one. Maybe someone here can comment on this.


The only thing that affects eligibility for a Roth IRA is your AGI (and your filing status). Very few teachers make enough to hit these limits.

If you are covered by a retirement plan at work, you are still eligible for a traditional IRA, regardless of your income or filing status. However, being covered by a plan means you might not be able to deduct your IRA contributions. The ceiling for traditional IRA dedictibility is much lower if you are covered by a plan.