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Catch-up Contributions - 401k and IRA


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Guest Suanne
Posted

Can a participant in a 401(k) plan take advantage of the catch-up contributions in both the 401(k) plan and an IRA?

Posted

Yes, they can. The catch-up for participants age 50 or older in a 401(k) plan is not coordinated with the similar catch-up for IRAs. Thus, in 2003, it's possible to put an additional $2,000 into the 401(k) and an additional $500 into an IRA.

Keep in mind that participation in the 401(k) may affect the deductibility of a contribution made to a traditional IRA.

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