No. of Recommendations: 0
SteveSMO: "Does anyone know the rules on contributing to a 401K and a Traditional IRA in the same year? My wife is quitting her job to stay at home early in 2009 and we want to know if we can do both in the same year."

The resident pros on the Tax board could answer this easily.

I am not one of the resident pros on that board, I feel compelled to write for clarification.

There is no topside income limit that would prohibit contribution to a traditional IRA. There may be an income limit that affects whether the contribution is deductible, and there is definitely an income limit if another plan is available. IIRC, there may be an age limit for making contributions to a Traditinal IRA, but check that if it matters to you.

There are income limits for contributions to a Roth IRA, but that discussion is outside the scope of your question.

To contribute to a traditional IRA one must have earned income in at least the amount of the contribution. Spouses may under certain circumstances - filing MFJ, IIRC, count the earned income of the other spouse for purposes of meeting this requirement.

Regards, JAFO

NOT LEGAL ADVICE
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.