I've written before about how 401ks and Roth IRAs can and should work together as part of your retirement savings. Often, the Roth IRA gets left out of many retirement plans, but as long as you qualify, you should strongly consider a Roth IRA as part of your retirement savings strategy.
Using the 401k and Roth IRA together and this piece from Money is another retirement reminder to do so. The article goes on and on and on before it gets to the point, which is:
So I would have no problem, for example, with you contributing to both your 401(k) and a Roth.
Not a glowing recommendation, but the article really does endorse using both. Here's what it implies (and what I agree with) as far as how people should use the 401k and Roth IRA together to save for retirement:
1. Start by contributing to your 401k so that you get the maximum employer match (and no more at this point).
2. Next, fully fund a Roth IRA.
3. If you still have money left over to save for retirement, put it into your 401k up to the point where you hit the annual limit.
It's pretty simple, really.
For more on saving for retirement, see these posts:
Nice site...but I was hoping to find some information on overseas money transfers.
Posted by: Dave T | June 05, 2006 at 06:01 PM
I was wondering what kind of accounts are there for people who want to stash away for a first house while getting the benefits of tax free money and best interest I plane on saving for 2 1/2 yrs about 150,000, I can save my whole pay check each month.. then at the end of those 2 yrs I want to transfer that money to buy a house cash to skip out on intrest... I make about 60,000 a yr. What kind of strategies do I have to maximze that money and accounts to gain from???
Posted by: BUSINESS_KING | June 05, 2006 at 09:39 PM
Anyone have any thoughts/advice on this?
Posted by: FMF | June 09, 2006 at 10:04 AM