Roth IRA and Roth 401K contribuions
I have a person who is 68, works parttime makine 102,000 and is married. Can he contribute 5K to a roth IRA for himself and his wife, and also contribute 15,500 to his Roth 401K at work? He has been told there is a total contribution max of 10K?
Permalink Submitted by Clyde Wolf on Mon, 2009-03-16 23:36
Mschlipman,
I am not sure where the $10,000 limit originated, or to what it applies. That does not sound right.
Your person could contribute up to $6,000 per ROTH IRA, unless…
they have other income making their MAGI greater than $159,000. That would limit the IRA contribution. See IRS Pub 590, Individual Retirement Arrangements, page 60 as to how the MAGI limits ROTH IRA contributions.
Permalink Submitted by Alan Spross on Tue, 2009-03-17 00:10
I agree.
The 2009 Roth 401k deferral max of 22,000 (16,500 plus 5,500 catch up) is only reduced by deferral to the pre tax 401k account. A Roth IRA contribution would not be affected by the 401k deferral and vice versa unless the modified AGI limits mentioned by cwolf come into play.
Was that 10,000 limit possibly related to 2008 deferrals that are now excess contributions to the plan due to non discrimination tests?
Permalink Submitted by Mark Schlipman on Mon, 2009-03-30 18:35
Thanks,
I cannot find anything other than income that would restrict someone from contributing 6,000 to a Roth even with a max in contribution to the roth 401K.
I have no idea where the CPA is coming from.
Permalink Submitted by mk foss on Mon, 2009-03-30 20:46
I’m also wondering about the 10k limit. Could the employer possibly only accept 10k in the Roth 401k? That’s one thing to check.
Also the Simple IRA/Simple 401k limit for 2008 was $10,500. Maybe there is some confusion about the type of plan. An additional $2,500 was allowed for a Simple in 2008 making the max for someone over 50 $13,000.