I’m not yet eligible for a 401(k) through my job, so in the meantime I’ve been maxing out my Roth IRA. I was told that once I qualify for the 401(k), I won’t be able to contribute to the Roth anymore. If that’s the case, why is the usual advice to max out both the Roth IRA and the 401(k)?
Confused about something my advisor said and advice given here?
byu/bozofire123 ininvesting
Posted by bozofire123
1 Comment
You advisor is 100% wrong. For deduction on TRADITIONAL IRA there is a seperate cutoff for if you have no retirement plan or you do.
For Roth IRA there is just one limit.
> If that’s the case, why is the usual advice to max out both the Roth IRA and the 401(k)?
Because your advisor is wrong. I would question on what else they are wrong about that you are paying for.
Also there is a “backdoor” to Roth IRA (but not trad IRA). So if below the income limit you can do a “normal Roth” and if above the income limit you can do a “backdoor roth”. With a little bit of planning to ensure you have no trad IRA balances everyone can do a Roth IRA even Elon Musk if he wants. The income limit is pretty trivial to bypass.