Comments on: IRA Basics – Part 1

By: BM

BM — Thu, 09 Apr 2009 12:49:26 +0000

Thanks Kristy & Pl, I appreciate your insight into this matter.

By: Kristy

Kristy — Thu, 09 Apr 2009 01:44:17 +0000

@ BM – Perhaps your state has some specific requirement that says you can’t have both, but as a general rule you can. The only other thing I can think of is that the financial planner you were dealing with wanted you to do a Roth for whatever reason and lied to you. I have a Traditional, a Roth, and a 401(k).

By: BM

BM — Wed, 08 Apr 2009 19:25:49 +0000

Hmm…I was told by financial planners when I was looking to get started investing last year that you could not open a Traditional IRA and 401(k) account at the same time. I eventually decided to invest on my own because their services were quite expensive.

By: pl

pl — Wed, 08 Apr 2009 18:38:48 +0000

BM,

Traditional. I have that and three 401(k)s currently open (two from former employers).

By: BM

BM — Wed, 08 Apr 2009 18:23:59 +0000

pl,

Is that a Traditional IRA or Roth IRA that you opened after a 401(k)? You can open Roth IRA whether you have a 401(k) or not, because contributions to Roth IRA is not tax deductible. Where as contributions to a traditional IRA is tax deductible just like 401(k).

By: pl

pl — Wed, 08 Apr 2009 17:56:08 +0000

“BM”: Since when is opening an IRA contingent on weather or not your employer offers a 401(K) plan? I opened my IRA well after starting my first 401(k).

By: BM

BM — Wed, 08 Apr 2009 16:49:56 +0000

My Only beef with Traditional IRA’s is that it limits you to $5K per year, where as 401(k) which is also tax deffered like just IRA allows you to contribute up to $15500. Also you cannot open a Traditional IRA if you 401(k) plan is offered by your employer. You have more low cost investment options available with a Traditional IRA, where as with a 401(k) you are forced to choose from what’s available in your plan.