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Personal Finance and Investing

A HERETIC I AM

(24,365 posts)

2. I do not have both, but from a practical point of view, it depends.

Reply to RandySF (Original post)

Sat Feb 21, 2015, 02:16 PM

Feb 2015

If one contributes to a 401(k) then there is no real advantage to contributing to a traditional IRA. One advantage to IRA contributions in the absence of a 401(k) is the contributions, with some exceptions are deductible, that is they lower your adjusted gross income, therefore your tax burden - same with a 401(k).

If you had no 401(k) and your aim was to lower your tax burden, then the majority of the annual allowable maximum should go into a traditional IRA and a smaller percentage into the Roth. If lowering your tax burden isn't a priority, then place the majority into the Roth.

See this IRS page for more detail on limits and deductability.;

http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-IRA-Contribution-Limits

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Question for those with both Traditional and Roth IRA's [View all] RandySF Feb 2015 OP

My husband has both csziggy Feb 2015 #1

I do not have both, but from a practical point of view, it depends. A HERETIC I AM Feb 2015 #2

I do have a 401(k) but no match RandySF Feb 2015 #3

Even though there is no match, you have a much higher annual limit with your employers plan. A HERETIC I AM Feb 2015 #4