401K vs. Roth IRA- how much in each one?
Sunday, August 19th, 2007
Lola76 asked:
I have read differing opinions on this and don’t know which is better. I first read to contribute as much as you can to the 401K and then open an IRA on top of that. I recently read to only contribute what your company matches to the 401K and invest the rest in a IRA. Someone at work told me that because of my age, I should take advantage of the pre tax and do the 401K. But I know I want an IRA b/c of the tax free investment income.
I currently contribute 12% to my 401K and do not have an IRA yet.
I was thinking of leaving the 12% and investing maybe $100 - $200 a month in the IRA- is that enough? I can’t afford more than that without reducing the % to my 401K. Thank you!!
I was talking about a Roth IRA, thanks for clarifying. I definitely am not maxing out my 401K each year, so after the 4% match- I don’t know what’s best. I really don’t want to pay a financial adviser if I can figure it out for myself
Question posted courtesy of: Lucille
I have read differing opinions on this and don’t know which is better. I first read to contribute as much as you can to the 401K and then open an IRA on top of that. I recently read to only contribute what your company matches to the 401K and invest the rest in a IRA. Someone at work told me that because of my age, I should take advantage of the pre tax and do the 401K. But I know I want an IRA b/c of the tax free investment income.
I currently contribute 12% to my 401K and do not have an IRA yet.
I was thinking of leaving the 12% and investing maybe $100 - $200 a month in the IRA- is that enough? I can’t afford more than that without reducing the % to my 401K. Thank you!!
I was talking about a Roth IRA, thanks for clarifying. I definitely am not maxing out my 401K each year, so after the 4% match- I don’t know what’s best. I really don’t want to pay a financial adviser if I can figure it out for myself
Question posted courtesy of: Lucille
