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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
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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
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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.
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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
No. of Recommendations: 0
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.
