Maxed the Roths for 2016

[disneysteve]

I just sent in the final 2016 contributions for both of our Roths so they are fully funded at $6,500 each (we're both over 50). I dragged my feet a bit on funding them this year because early on I thought there might be a chance we'd be over the income limit but we won't be so I topped them off.

[greenskeeper]

As of Dec 17th my roth will be maxed out for 2016.

[rennigade]

Just queued up the last order on my roth today.

[scfr]

Do you anticipate being in a higher tax bracket in retirement? I know that none of us knows, but it's something we have to consider when weighing Roth vs. Traditional IRAs, especially for those of us in the AARP-eligible age group.

Roth vs. traditional is a question I ponder every year (well, every year that we are eligible for a Roth), and at my age I have started to lean more towards traditional.

[greenskeeper]

I contribute equally to my 401k and roth ira

[disneysteve]

Roth vs. traditional is a question I ponder every year

We have a mix of taxable and tax-free investments. In addition to our Roths, O also contribute to a SEP-IRA and a 401k. We've got rollover IRAs from prior jobs. And my wife has a 401k and a 403b that we need to rollover. We also have taxable investment accounts that are earmarked for retirement.

[thestrongprofessional]

Super Steve,

What is a SEP-IRA?

Raphael

[disneysteve]

Super Steve,

What is a SEP-IRA?

Raphael

That's a self-employed IRA. I contribute to that based on income earned from medical surveys I do and eBay sales.

[QuarterMillionMan]

Not to be a Debbie Downer but maxing an IRA at $6500 is fairly easy (over 50).

But did you max out your 401(k), 403(b), or 457 at $24,000 (over 50), now that is a tremendous accomplishment. I'm on par for both at $30,500.

[disneysteve]

Not to be a Debbie Downer but maxing an IRA at $6500 is fairly easy (over 50).

But did you max out your 401(k), 403(b), or 457 at $24,000 (over 50), now that is a tremendous accomplishment. I'm on par for both at $30,500.

How easy it is to max the Roths obviously depends on your income. And I'm also doing my wife's so it's $13,000.

As for 401k, I didn't have one until May when I started my per diem job. I've only got 10% going in right now because we need that income for other things, which is part of why I took the job. YTD I've earned 20K so 2K to the 401k so far.

[sv2007]

Good for you.

Many people under-appreciate the tax benefits of these retirement accounts. Save today for a much better tomorrow.

We max out our IRAs every year. And little by little, there's now a sizeable amount in our IRAs.

[sv2007]

Not to be a Debbie Downer but maxing an IRA at $6500 is fairly easy (over 50).

But did you max out your 401(k), 403(b), or 457 at $24,000 (over 50), now that is a tremendous accomplishment. I'm on par for both at $30,500.

Whether easy or not, it is a good thing to do (to max our your IRA). Take advantage of this gov benefit because we hardly get any (too many benefits are tied to income).

And good for you too for also maxing out the 401k.

Got to grab those free benefits. I've been maxing everything out since 1998; also been maxing out the flex spends, ESPP. Free money.

[sv2007]

I contribute equally to my 401k and roth ira

Why?

It seems more logical to concentrate in only one until you max it out.

[StormRichards]

Why?

It seems more logical to concentrate in only one until you max it out.

No it doesn't. Having both provides you with more flexibility with managing your taxable income during retirement since you can draw on the Roth tax free.

Since most company 401ks provide some sort of match, it makes sense to contribute up to the amount to maximize that match (free money). However, the average person can't afford to max out their 401k every year. If they were to solely focus on 401k, they would lose out of the benefits of a Roth.

I think this is another example of how you are out of touch with the average person.

[LivingAlmostLarge]

DS how much can you contribute to the SEP IRA?