sportchampps;1390792 wrote:And if your company doesn't match your 401k contributions which sadly many companies are moving away from then your much better off investing on your own if you have knowledge of the market.

I would still max your tax free contribution since you can only put $5k into an IRA each year tax free.

Most definitely everything past tax free contributions in a 401k is stupid.

I lower my tax bill as much as I can by maxing my 401k and IRA before I put money elsewhere in the market.

sportchampps;1390976 wrote:I guess my knowledge as a CPA and experience of real life situations mean nothing as you are an expert on what everyone should be doing with their money. Forget that I get my salary based on my knowledge in this area. The best situation is a middle ground where your tax return will allow you a small bubble to cover any unforeseen circumstances.

I do agree with this, I plan for a $100-$500 refund every year, not exactly a $0 refund.

jmog;1391653 wrote:I would still max your tax free contribution since you can only put $5k into an IRA each year tax free.

I don't think I realized I could contribute to an IRA if I had a qualified 401k plan. Do you mean $5k post-tax contributions into an IRA or are you still talking pre-tax?

Being self-employed it doesn't really matter to me, and despite the horrid taxes at least I can cut it down with huge contributions to a SEP

gut;1391713 wrote:I don't think I realized I could contribute to an IRA if I had a qualified 401k plan. Do you mean $5k post-tax contributions into an IRA or are you still talking pre-tax?

Being self-employed it doesn't really matter to me, and despite the horrid taxes at least I can cut it down with huge contributions to a SEP

You can deduct up to $5k into an IRA. You put it in post taxes but can deduct it at the end of the year when you file.

I believe the only thing that can lower that is your income level, the more you make the amount you can deduct goes down from $5k.

401k is a set limit regardless of income, the only difference is the "catchup" contributions when you get older, where you can put more in because you are nearing retirement.

So, in 2012 one could put in $17k of their own money (any company match is on top of that) into their 401k pre-tax right out of your paycheck.

Even if you max out your 401k you can still take money you get from your check, after taxes, and put as much as you want into an IRA. However, you can only deduct UP TO $5k at the end of the year. That is regardless of 401k contribution I am pretty sure.


EDIT: I just looked it up, the $5k IRA limit is only affected if you ARE covered by a 401k at work AND make more than certain income levels (based on filing status).

I think that's what it is....the IRA pre-tax is phased out above a certain income level.

gut;1391722 wrote:I think that's what it is....the IRA pre-tax is phased out above a certain income level.

Yes, but only if you have a 401k as well.

I had my IRA deduction reduced for 2012. I did not get the full $5000.

gut;1391722 wrote:I think that's what it is....the IRA pre-tax is phased out above a certain income level.

Yes. I believe it's around the social security contribution cap number.

Crimson and Gray Hair;1390560 wrote:Alrighty then! Sounds like your ducks are all in a row.

So why do you think it's bad we have to pay?