What's the maximum amount that I can invest in my 403b, and also invest into my Roth IRA ?

Question

I mean can I contribute the max for both my 403b and my Roth? Meaning a total of $15000 for my 403b and $4000 for my Roth IRA for a total of $19000 for the year 2005 to 2006.

Answer 1

The short answer is that you can contribute the maximum amount to your 403(b) account ($15,000 in 2006) and your Roth IRA ($4,000 in 2006) for a total of $19,000 in contributions.

The more detailed answer is that you may be able to contribute more to both accounts than you originally thought! Here are the two catch-up contribution possibilities for your scenario:

1) If you are over 50 years old, you can contribute an additional $5,000 in 2006 to your 403(b) plan and an additional $1,000 to your Roth IRA. That would mean that, if you are over 50, you can contribute up to $25,000 to both accounts in 2006!

($15,000 + $5,000 catch-up) + ($4,000 + $1,000 catch-up)

But, wait, it gets better...

2) It is a lesser-known fact that - regardless of age - if you have at least 15 years of qualified health-, education-, or church-related service in a 403(b) plan, you may be eligible for an additional $3,000 catch-up contribution to your account! So, if you are over the age of 50, you may well qualify to contribute up to $23,000 to your 403(b) and $5,000 to your Roth IRA for a total of $28,000 in 2006! If you are under the age of 50, you may still qualify for the years-of-service catch-up in order to contribute $18,000 to your 403(b) and $4,000 to your Roth IRA, for a total of $22,000 in 2006!

So, check your driver's license to see if you qualify for the age 50 catch-up and check with your Human Resource contact at work to see if you qualify for the years of service catch-up contribution in your 403(b) plan.

Just a reminder, almost all retirement contributions are subject to overarching limits set forth in IRS code Section 415. Please speak with a qualified tax advisor for more information before maxing out your 403(b) and Roth IRA.

Answer 2

For 403B, the maximum is $15,000 for 2006 and later year.
For Roth IRA, the maximum is $4,000 for 2006-2007.

Answer 3

right here's one area of save in thoughts about the Roth IRA account. there is rarely any tax on it the position as there is on your 401k. This will develop into significant at the same time as thinking your asset blend. income generating investments are taxed on the full tax price as will be your 401k. hence that's wise to make investments a minimum of a few of your 401k in income generating sources--bonds, LPs, REITs. The income from each and each of those is taxed on the full tax price besides. Now because the Roth IRA is rarely taxed, it also is wise to positioned those form of sources into the Roth IRA also. and also fairness investments. What you missed to coach are investments outside of those 2 vehicles. once you've some, they could be investments which will be taxed on the capital features price--fairness investments. actually, except you're in the optimum tax bracket that's wise to have area of your fairness investments outside of a 401k. by ability of doing so your entire tax invoice will be decreased, really in case you're a lengthy time period investor. once you've the least hankering to make investments a number of you money in gold and silver those actually could be interior a Roth IRA. both are taxed as collectibles otherwise. yet another area of evaluate in regard to the 401k is that in destiny years the tax price would really be better, perchance significantly better, than it at the moment is. because you quite don't have any determination of putting non-mutual fund investments interior a 401k except for perchance corporation inventory, it actual does make sense to make investments Roth IRA money in corporation stocks somewhat than mutual money. yet be careful. that's amazingly tempting for most to take a position with their Roth IRA account really little while period procuring and promoting which otherwise will be taxed on the full tax price. which will be a competent thanks to reduce that fee of the Roth account. Be quite careful. make investments in the likes of MCD, WMT, JNJ, BDX, KO, etc. or maybe ETP with its 8% dividend or PAA with its 7.5% dividend. and do not make investments it in fewer than 5 diverse agencies.

Answer 4

The short answer is "yes." The 403(b) and Roth IRA are considered separate and have separate (i.e. not combined) contribution ceilings.