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My company recently opened up a Roth 401(K) option that I'm sending about $6,000 a year to currently in addition to my normal 401(K) contributions and matching.

I have a Roth IRA that I opened years ago but have not contributed to in a while. I'd like to start putting more money there als (probably $3,000-$5,000 a year), but wanted to make sure that the contribution limits for the Roth IRA are not effected by my Roth 401(K) contributions I just started at my company.

I'm assuming the two are completely separate and limitations on contributions don't overlap, but just wanted to ask to make sure.

Roth 401(K) Contribution Limit for 2011: $16,500
- I'm currently sending $6,000 a year there from my paychecks
Roth IRA Contribution Limit for 2011: $5,000
- I'd like to contribute up to $5,000 a year here (is this ok?)

I'm well under the catch-up age

Thanks,
Eric
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I have a Roth IRA that I opened years ago but have not contributed to in a while. I'd like to start putting more money there als (probably $3,000-$5,000 a year), but wanted to make sure that the contribution limits for the Roth IRA are not effected by my Roth 401(K) contributions I just started at my company.

401k and IRA limits are unrelated. So you can put the max amount into each.

But the regular 401k and regular IRA share a limit. So you can only put 16,500 total into the two combined.

Likewise regular IRA and Roth IRA share a single limit. You can split the 5000 limit between the two IRAs any way you choose.

I mention that because you mention both a regular 401k and a Roth 401k.

--Peter
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But the regular 401k and regular IRA share a limit. So you can only put 16,500 total into the two combined.

I think you mistyped. The regular 401k and Roth 401k share a limit.

PSU
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ah, ok makes sense. So the following scenario wouldn't be an issue for a given year

2011 Contribution Example
401(K): $10,500 (plus $5,000 company match)
Roth 401(K): $6,000

Roth IRA: $3,000

-Eric
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I think you mistyped. The regular 401k and Roth 401k share a limit.

You are correct. I mistyped.

That's what I get for trying to type up a response too quickly and not proofreading it.

--Peter <== thinking that non-existent edit feature might be a good idea after all.
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Don't forget that these limits are separate from a spouses limits. Even if there is a spouse without any income they can still have Roth or IRA contributions too based on your joint income.

When you are making the maximum 401k contribution be sure to check to see how your company will handle their match after you reach your maximum contribution. There are two questions;

1) Do they stop taking the contributions automatically? Some plans allow non-deductible contributions and your money could end up treated that way.

2) If you reach the maximum before the end of year, do they still match for the rest of the year? For example if you hit the limit in November and stop contributing, will they still pay the Decembers paychecks match? Some companies don't.

Greg
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