My financial advisor told me I could make traditional IRA contribution even though I am making 401k contribution. In 2003, I opened IRA and Roth IRA both. I DID NOT take tax deduction for traditional IRA. I have only lost money in my traditional IRA account. Now I understand that I shouldn't have made traditional IRA contribution when I had maxed out in 401k. What do I do?
120587
My idea would be to sell out your traditional ira and put the remaining into your roth ira. You should be talking to your financial advisor about all this. He or She should know all this and be able to guide you what to do. if not, time to get a new Financial advisor. But, at least check out this site which I pulled for you while doing my own research. It looks like it nails it on the head of what your asking about. Read it thoroughly and take it in, then talk to your financial advisor and go from there. Hope I was of some help to you. Good luck! Shuuutnstr =o)\nhttp://www.bankrate.com/brm/itax/news/taxguide/20060102e1.asp
374507
Only if you are a first time home buyer, then you can use IRA funds without penalty (see http://www.irs.gov/taxtopics/tc558.html ).  \n\nBest wishes.
26042
good question.  401k's are excellent vehicles for preparing for retirement.  The greatest part about them is that usually your company gives you free money when you participate, called a match.  The way it usually works is that you decide how much, either dollars or a percentage of your income, you want to put in to the plan.  Then you decide which investments to pick (this can be tricky without knowing what they offer).  Ask the person offering the plan to help. Use a mix.\n\nWhatever you put into the plan is deducted from your income.  Heres an example:\n\nYour income:               $40,000\nContribution amt:   5%:    $2000 \nCompany match 50c per $:   $1000 \nup to 5%                    \n\nTotal contribution:        $3000\n\n(New taxable income:$38,000)\n\nIf you do this until normal retirement age of 60 and get a 10% return on your money over that time, you'll end up with almost $1,200,000.  \n\nSince now youre only taxed on $38,000, when you decide to retire and get your money you have to pay taxes on all the money you take out (not the whole $1.2 million unless you take it all at once).  If you take it out before your 59 1/2 you will have to pay an additional 10% penalty on whatever you take out. There are exceptions.\n\nThese are pretty much the pros and cons, but if you start now and stay consistent you'll be able to retire very comfortably.
652736
At 23, time is your best friend (hooray compound interest).  Your best bet is to (if you haven't already,) open up and max out your Roth IRA.  This allows you to allow that compounding to work in a tax-free manner after you deposit. See what a difference that can make here: http://www.dinkytown.net/java/RothIRA.html\n\nIf you work for a company that provides matching funds for your 401(k) or similar retirement account, be sure to get the maximum match - it's free money! (that has to come from your income, but you can use your $10K to buffer your cost of living while you max your contributions).\n\nNote, it'll depend both on your capital gains, and the tax efficiency of your investments, but when I ran the numbers for myself, I found that I was much better off using my 401(k) for investment even though I plan on early withdrawal: http://randomfoo.net/blog/id/4087\n\n(Over a longer time-horizon, the tax efficiency is going to make a huge difference, plus you can also drastically rebalance with near impunity, tax free)\n\nRegardless of the type of account you put your money in, you still have to decide what you're going to invest in.  There aren't guaranteed returns, but for your goals (growth until eventual financial independence, yes?) you're best bet is probably a good index mutual fund. (You'll want to do your own research on this - although index funds are by definition 'average' they tend to provide total returns (after expenses) that beat the vast majority of mutual funds.  Here's one article to help you get started on why that's the case: http://www.fool.com/mutualfunds/indexfunds/indexfunds01.htm\n\nYour best course of action as you save towards financial independence is to continue investing (dollar cost averaging) and to diversify as your capital grows (bonds, international, REITs, metals) and to try to keep an eye towards what your goals are.  A good book on the subject matter is "You Money Or Your Life" by Domniguez and Robin, which talks less about investing (they suggest an extremely conservative approach), but more about a good basic mindset/framework for thinking about money.\n\nIf your goal is early retirement (reaching the point where you can live off your investments) you may also want to take a look at FIRECalc, an interesting early retirement calculator: http://fireseeker.com/ and the related Early Retirement forums (lurking and reading the archives is a good way to dip a toe in the water, so to speak): http://early-retirement.org/forums/
452865
THe best thing to do is locate your statements from the 401k plan, not the company you worked for.\nCompany's like Charles Schwab or The Hartford are the 401k providers.  Usually you should get a quarterly statement about your 401k to determine which company holds the account.  You can also try calling different firms that you believe may hold the account, as they can often locate an accoutn with your SS #  \n\ngood luck
243182
Under IRS rules, you can only roll over a 401k into a Traditional IRA and wait at least one year before moving it into Roth IRA. Remember, 401k sitting in previous employers will not have any growth. It is a frozen account until you roll it over.\n\nIRAs are always a good plan to save for retirement. You can pick any mutual funds that is offered by a financial institution (most mutual funds require a minimum initial deposit of $1000). And can be tax free after age 59 1/2 when you start using it.
369398
You can ALWAYS take your own contributions out of a Roth IRA, as you say, they are after tax earnings and the IRS doesn't care.\n\nThey do care about the earnings however.  If you take the earnings out under age 59 1/2, regardless if you meet the 5 year rule or not, you pay taxes and a 10% IRS penalty (unless you meet an exception).  The only exceptions to this rule are if you meet the 5 year rule & are disabled, dead, qualify for a first time home purchase, are taking 72(t) distributions, have qualifying medical expenses, using the money for college, you're paying medical insurance after losing your job or if the IRS is penalizing your IRA.\n\ncheck out page 60 of IRS Publication 590 (see the link) for all the information you could ever want to know about Individual Retirement Arrangements!  Have Fun!!!
621574
IRA is Individual Retirement Account.  It is a retirement account.  The basic forms of IRA's are Traditional and Roth.  Traditionals are tax deferred (you dont pay taxes on the money you put into it but you pay when you take it out and any gains).  Roth grows tax-free but you pay taxes on the money prior to putting it in the Roth IRA.\n\nCD's are Certificates of Deposit.  It is basically cash that is locked up for a predetermined period of time that earns interest at a higher rate than the overnight rate you get on a basic savings account.  \n\n401's?  If you mean 401k's, they are similar to Traditional IRA's but are associated with your employer (whom will usually offer matching funds up to a certain point).  This is another retirement account.
59808
You can always rollover to your personal IRA account rather than taking the distribution.  Taking out the money from 401K not a good thing if you are not of retirement age because you have to give a lot to taxes and penalties.
110203
You should be able to roll over a 401k into an IRA without a problem.  Those Prudential people just don't want to lose your business.  Your money guy at the new place should be able to take care of all this for you.  And if he can't, find a new money guy.\n\n(Unless you bought some sort of annuity with it.  I can't tell if you did.)
288097
Find a financial advisor you trust (through interviewing them).  They will provide good investment advice.  Both IRA's grow tax deferred (you don't pay earnings along the way).  The differences are that \n\nTraditional ira- tax write off on contributions, taxed fully when withdraw, can't withdraw b4 59.5yrs old w/o 10% irs penalty and taxed on everything\n\nRoth- all contributions are already taxed (can't use it as a write off), by the time you're 59.5 yrs old (and assuming you had the account at least for 5 yrs) everything is tax free.  You are also allowed to take out the principal at anytime w/o penalty.  Some other rules apply to fully withdraw w/o penalty (i.e. 1st home purchase, higher education, etc.)\n\nAgain, if you have little to no investment experience, DO NOT listen to those hot stock tips, Suze Orman, or whatever is on TV.  By the time you hear of those 20% returns, you're already too late (i.e. real estate).  Please, please work with a professional.
232545
On January 1, you can make your 2007 Roth IRA contributions The latest this can be done is actually April 15, 2008, but early contribution allows an extra 14 months of tax-free growth.
340210
Rules on pensions just changed on 6 April 2006 and now you can only make a contribution in relation to 2006/07 during 2006/07, so no spreading anymore.  \n\nIf you made a big contribution you could reduce this year's tax to nil which would help to give you extra cash to pay earlier year's tax.\n\nBe aware you may well have incurred penalties by this stage.\n\nWorthwhile finding a tax adviser to help you.
377622
Mentally NO!  Financially YES!  I max out my 401K & have maxed out my Roth IRA every year!  Not to mention life insurance!  Did I mention I have been doing this since I was 22?
204396
It is true...you can use a self directed IRA to defer your tax obligations until your retirement age. Any money that you place into the IRA and any profit that you make can be kept into the IRA account and your not required to pay taxes until you make with drawls at your retirement age. Of course you always want to consult a CPA professional on the specific requirements of this program. But I believe you have it correct in a generalized format. A lot of hard money lenders use that vehicle or a trust to minimize their tax obligations.
461340
401k money is meant for retirement, so unless you're rolling into another retirement account (i.e. IRA), then you will get penalized.  You might want to consider borrowing against your 401k, but there would be implications if you quit your job as most repayment for the loans from 401k accounts are automatically deducted from your paycheck.
24330
If the employer provided a match, then yes.  If not and they have a match with the traditional 401k I would contribute to that.  If no match to either, then I would invest outside of my employer.  First in a Roth IRA and then in I bonds and mutual funds.