No. of Recommendations: 1
I was reading through the IRS information that was posted and did I understand correctly that there is no income limit when contributing to a Traditional IRA? Just not to exceed $4000, or did I miss something?

That is correct. The only requirement is that you must have at least as much earned income as you contribute. The rub is, above certain income limits, you may not deduct the contribution. The income limits depend on your filing status, your eligibility for a retirement plan at work, and, if married, your spouses' eligibility for a retirement plan at work. The detailed requirements are in Publication 590.

Also, this $4000 counts toward the $15,500 limit for 2007, correct?

Assuming that you are talking about the 401(k) plan limit of $15,500 for 2007, no. An IRA is separate from a 401(k), and their limits do not affect each other, except for the previously mentioned interaction between 401(k) and MAGI, to be eligible for a Roth.

Also, if I max out both our Roth IRA's for 2007 and don't contribute going forward (if we exceed the limit) would it be worthwhile to let the money continue to grow in this account or should I move it as soon as I know we will not be able to contribute anymore? I opened Target Retirement accounts and would like to continue with them.

Assuming that the $4000 contribution grows at an 8% average rate for 30 years, it will grow to over $40k if you leave it untouched. With two accounts, you will end up with over $80k.

AJ
Print the post  

Announcements

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.