IRA or 401K for retirement?
356151
You can choose both! If your not too rich.\n\nIf your employer matches your contributions to the 401k...put in enough to get the match.....put the rest of your money in a Traditional IRA ($4,000) max.......you can put more money tax defered in the 401k but an IRA gives you more control over your money and allows you to choose how to invest it.\n\nNow many people will whine and complain that you should use a Roth IRA....I dont care what you do....but if you use a traditional IRA..you get a tax break now......\n\nFor Further reading on this..check our IRS publication 509.
219511
You should check with whoever is managing your plan, or your accountant should know, but this might be helpful:  \n\nDo I have to withdraw all of my 401(k) savings when I reach age 70½?\nWhen you reach age 70½, you're required to withdraw a minimum amount depending on your life expectancy. An actuarial table showing life expectancies is available from the Internal Revenue Service (IRS). You must begin receiving these payments by April 1 of the calendar year following the year you turn 70½. \n\nTo determine your required minimum distribution, divide your 401(k) account balance by the number of years remaining in your life or by the remaining joint life expectancy of you and your spouse. Try the calculation both ways. You may find it more advantageous to determine your mandatory withdrawal amount by using both life expectancies instead of yours alone. \n\nYou may have to recalculate this mandatory distribution amount each year because of your account balance and life expectancy. \n\nYou must pay income tax on each of these mandatory distributions. You cannot roll the distributions into an IRA.
251243
If you don't have the option of a 401(k) plan, how about investing in a roth IRA?  You can open one in your bank or online.  It's never too early to start investing for retirement.
133917
At a younger age, the Roth is the best way to go. All your earnings and withdraw will be tax free. Also, in certain "situations" such as buying a home for the first time or medical bills you can have access to the funds, but generally you will have to wait a while to get your money. This savings vehicle should probably be combined with something like a 401k-especially if you can get an employer to match. Finally, you can get a credit for your retirement contribution on your taxes if you meet certain AGI restrictions. It is called the Retirement Contribution Credit, and, as I understand it, can be applied for Roth contributions. You have until 3/15 to contribute for last years' Roth-if you so choose. Good Luck!
223414
As the other people have said, you can start either a regular IRA or a Roth IRA.  The money in these can be invested in a CD at a bank or into a number of other items, such as mutual funds.  The problem with having just the IRA is that you are limited as to how much you can invest.\nBesides the IRA, you may want to think about investing in an annuity.  In an annuity, you earnings grow tax deferred until retirement.  At retirement, you can have the money paid out as a lifetime income.  There generally is no limit as to how much money you can invest in the annuity.\nThere are different types of annuities.  You can get fixed, indexed, or variable ones.\nThe best thing I would recommend is talk to a financial representative to help you decide which plan best meets your needs.
84014
A 457 is a state sponsored retirement plan, and 403(b)'s are generally for not-for-profits.  I would suggest a regular old 401(k) even if you are a NFP, as the advantages are numberous, ranging from avoiding annuity wrapper fees to transportability of assets.  Look into it with someone qualified.  I don't know who is talking about 457 plans, they are probably not appropriate for you, and you're probably not even eligible to have one...might want to talk to someone else if someone mentioned that, unless you are a state agency or quasi-gov't entity.
820652
I'm a CPA and the Roth beats the traditional in almost every situation.  Think of it this way.......which is better?  Tax Deferred or Tax-Free?  With the traditional IRA you eventually pay the piper.\n\nTwo possible exceptions:  In the 401(k) scenario with an employer match, always take the free money.  Secondly, if you are nearing retirement and we are expecting a down market over the next five years, that might be a scenario where the deduction rather than the tax-free growth might make sense.  Run the numbers if this latter situation applies to you.
900036
I just rolled over my 401K to an ING Direct IRA account. They have great options and low maintenance fees. Check them out.  www.ingdirect.com
502213
If you are getting a higher interest rate from your IRA, then put your $ in to the IRA.  If the interest rate on the home loan is higher than the IRA, then put the $ on the home loan.  Which ever is going to return more $ to you.
121058
If your time horizon (retirement date) is more than 20 years out, its best to invest in a 401k plan rather than invest in a taxable plan.  The reason is that the 401k has certain tax advantages which allow you to defer current taxes out into the future which gives you more money to compound earnings against.  Also, if you are an employer, you dont pay employer taxes against the money invested in the 401k plan.
922819
Well, you're doing better than we are, I'll say that.\n\nAs for being on the "right track" it all depends on what your goals are. Investing and saving can get really complicated, so I recommend you talk to a financial advisor. They have alternatives for you that you hadn't thought before.\n\nMy manager was in a situation where she had an old 401k earning lousy interest (around 3%) for years, and is now making at least 12% on it. It's a higher risk, but she decided it was the best for her goals.\n\nAnother benefit right now is compeitions is pretty fierce for deposits, so if you do choose to go with your local bank or investment firm, chances are you can get a great deal.
123484
I agree, A ROTH IRA makes more sense in a lower-middle class income situation.  You don't really need an income tax deduction right now.\n\nThere IS a reason to open a traditional ira, however.  If you were in a high tax bracket, you would be able to lower your reported income by $4,000 this year (or $5,000 if you are over 50 years), thus potentially lowering your tax bracket.\n\nIf you have a 401k at work, ask about the brand new ROTH 401k, which puts after tax money into a 401k for you.  Again, this would be perfect in your situation, since you could put away more than $4,000 (up to $15,000 this year) and the money would come out tax free at retirement, when you could potentially be in a higher tax bracket.
300890
In my opinion, as long as you do not try to withdraw the money early (before 59 and 1/2 years old) a roth IRA is the best vehicle for retirement if you qualify for it.  Within the roth IRA you can invest in mutual funds that focus on bonds if you would like, or more aggressive funds if you like.  You can definitely make an asset allocation that suits your needs and risk tolerance.  Hope this helps.
442756
You should use 4000 to put into a ROTH IRA.  You can put another 4000 in a ROTH IRA for your wife.  If you are taking advantage of the tax deduction of mortgage interest, your interest rate is effectively 4%, so it probably makes more sense to invest rather than pay off your mortgage.\nYou might want to put your 2000 into municipal bonds which will give you tax-free income.
51089
My parents always said to "pay myself first." This means that I should contribute as much as I possibly can to any retirement accounts. If your employer is willing to pay 70 cents on the dollar up to 15% of your salary, you really should consider bumping up your contributions. The more you contribute now will add up to a lot more over the long run.\n\nDoes your 401K company allow you to pick how the money is invested? If they do, you should think about doing an aggressive growth tactic. I'm not saying have all of your money go toward aggressive growth, but that's where a large portion of it should go. The key is to diversify and have your money working for you in a variety of ways. Since time is on your side, you can afford to be a little more aggressive and assume a little more risk. \n\nThe compounding interest adds up over time, so the more you contribute now, the more you'll have when you retire.\n\nCheck out the calculators I've provided below. They can help to paint a better picture. I would also recommend talking to a financial planner. I hope this helps, and remember, pay yourself first =).
266753
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.)
1139316
First off, I would definately invest as much as possible in the 401k that the employer matches, that is an automatic 100% return. As far  as the mortgage, if you are planning on living in the home longer than 2010, you should put the most possible toward the mortgage after the 401k match or consider switching to a fixed mortgage before the adjustable rate gets very high.