401K and Roth IRA limits

[Guest stets]

New member, first post. Looks like a great resource. I searched but did not find anything that deals with this.

I understand it is allowed to contribute to both a 401K and a Roth IRA, but I can’t find anything specific on how the maximum annual Roth limit is affected by the 401K contribution, assuming AGI is under the limit.

Assuming a 25 year old freshly minted engineer is contributing to, but not maxing out a 401K, and with gross income in the 40-50K range, is there a way to determine how much he could contribute to a Roth IRA?

Thanks in advance.

[masteff]

I understand it is allowed to contribute to both a 401K and a Roth IRA, but I can’t find anything specific on how the maximum annual Roth limit is affected by the 401K contribution, assuming AGI is under the limit.

You're not finding anything because it's a trick question... the 402(g) limit and the Roth IRA limit are unrelated. Now, if the Roth is inside the 401(k) (ie, a Roth account) and not an entirely separate IRA account, then it's a different answer. But for a separate Roth IRA, the limit is simply the current annual limit of $5,000. IRS Publication 590 is helpful: http://www.irs.gov/pub/irs-pdf/p590.pdf

Here's where Kiplinger's once answered your basic question: http://www.kiplinger.com/columns/ask/archive/2006/q0814.htm

[Guest stets]

I understand it is allowed to contribute to both a 401K and a Roth IRA, but I can’t find anything specific on how the maximum annual Roth limit is affected by the 401K contribution, assuming AGI is under the limit.

You're not finding anything because it's a trick question... the 402(g) limit and the Roth IRA limit are unrelated. Now, if the Roth is inside the 401(k) (ie, a Roth account) and not an entirely separate IRA account, then it's a different answer. But for a separate Roth IRA, the limit is simply the current annual limit of $5,000. IRS Publication 590 is helpful: http://www.irs.gov/pub/irs-pdf/p590.pdf

Here's where Kiplinger's once answered your basic question: http://www.kiplinger.com/columns/ask/archive/2006/q0814.htm

Excellent, thank you very much.

Stets