contribution limits to roth and 401k both

[Guest zoran2]

Hi,

I'm just starting out with this so take it easy on me.

My employer's plan has a max 401(k) limit of 15000 per year.

I would like to contribute the following:

15000 to 401k

4000 to Roth (I would open this one on my own via ETrade)

Total: 19000

Or do i have to contribute like this

11000 to 401k

4000 to Roth (ETrade)

Total: 15000

[Below Ground]

The limit sounds like the 402(g) Limit, not a plan limit. Assuming you are not age 50 or more, the "11K / 4K Application" is used. Beyond that, I don't think you can do what you are saying.

If contributing under the 401(k) Plan, the account must also be under the Plan's trust. That would not be an account you can open on your own. I think you should first look to see if your employer's plan even offers Roth. Then, check with the plan admistrator on how to file the appropriate elections under the Plan.

I am tying to go easy on you Zoran2, but you really need to find out what is available under the Plan before you decide to go off and do something on your own. That could get you into deep trouble. Good luck.

[Bird]

Zoran, it's not perfectly clear what you're asking about, but I'm going to guess that the extra $4,000 is for a Roth IRA.

If that's the case, then you can indeed maximize your 401(k) contributions at $15,000, and then make an additional $4,000 Roth IRA contribution...if you are eligible to make a Roth contribution. That eligibility is phased out at $95,000-$110,000 AGI for unmarried filers; $150,000-$160,000 for married filers, and $0-$10,000 for married taxpayers filing separately.

[Below Ground]

Zoran2, so that there is no confusion...

If you mean having both contributions be under your employer's 401(k) plan then the $11K / $4K Application is used. (Assuming you are not over age 50). If you mean $15K under the 401(k) and $4,000 under a separate Roth IRA, then as Bird posted, you can do it. (Subject to limits Bird noted.)

I just wanted to make the distinction between Bird's post and mine. They are not in conflict. We just read your post differently. I suppose that since your post is under IRAs, Bird correctly interpreted your question. I assumed that you were talking about Roth 401(k), not Roth IRA. Regardless, if you are talking about a Roth 401(k) Contribution, you should first go to your plan administrator.

Hope this helps.

[Guest zoran2]

Zoran, it's not perfectly clear what you're asking about, but I'm going to guess that the extra $4,000 is for a Roth IRA.

If that's the case, then you can indeed maximize your 401(k) contributions at $15,000, and then make an additional $4,000 Roth IRA contribution...if you are eligible to make a Roth contribution. That eligibility is phased out at $95,000-$110,000 AGI for unmarried filers; $150,000-$160,000 for married filers, and $0-$10,000 for married taxpayers filing separately.

Yes, sorry for not being clearer. I am learning more and more every day.

I am learning there are 4 plans that I know of

1. 401(k) before tax

2. 401(k) Roth after tax

3. Traditional IRA before tax

4. Roth IRA after tax

1 and 2 would be really one plan 401(k) and 3 and 4 is called IRA if I understand correctly.

Yes, I want to max out 1 and 2 up to the 15000 limit and then open up my own Roth IRA (4) and contribute additional 4000 to it.

The main thing I think I was confused is if 402(g) limit applies to 1 and 2 only or to 1, 2, 3, and 4 altogether. So the consensus is that it applies only to the 401(k) plans.

Thanks for your help!

In fact, I am finding out I can open up in addition to the above another $4K Roth IRA for my spouse as well.

Our AGI is <150K