If I make $8000, can I put money in both IRAs, traditional and roth? Is the $4000 limit total or each? thanks
2006-12-20 02:19:11 · 7 answers · asked by jean 4 in Business & Finance ➔ Investing
You can only contribute $4000/year into all IRAs you own. You may contribute more, but you will owe taxes on anything above $4000 limit.
If you have a non-working spouse, you may setup an IRA for him/her and put in $4000 there for a total of $8000.
2006-12-20 06:51:46 · answer #1 · answered by Anonymous · 3⤊ 0⤋
you can only put away $4000 per year, you can't put a total of $4000 into both accounts, that would be $8000. you should put it all in a roth ira, it is tax free forever after that, even when you use the money, and you can, at any time, take out your contributions without any tax or penalty, what you can not take out is your earnings without a penalty until you are around age 60. if you are a good saver and try to put money into an ira each year, someday you will have a huge pile of money. a better way to invest money is to let a mutual fund comany take money directly out of your checking account once a month and put it in your ira account. don't open an ira at a bank and put it in a cd or something like that, open it up with a mutual fund company. call Vanguard and they will help you set it up, just a few forms to complete.
2006-12-20 03:27:11 · answer #2 · answered by besthusbandever 4 · 0⤊ 0⤋
Put it all in a roth. No point deferring taxes, as you barely pay them now and will most likely be making a lot more later on. You are also pretty young so you can gte a lot of tax free growth using the roth.
The total is $4k total.
Note, a full-time student cannot contribute to an IRA.
2006-12-20 02:50:37 · answer #3 · answered by Ubiquity 2 · 1⤊ 0⤋
Wow, people take so many words to answer a simple question.
Here's your answer. It's $4000 total per year. Mix/match it any way you want. I'd recommend $4000 into a ROTH IRA, but it's your choice.
Hope that helps!
2006-12-20 08:48:40 · answer #4 · answered by Yada Yada Yada 7 · 1⤊ 0⤋
The limit is in total. You may only contribute $4000.00 to IRAs at your income level whether you are covered by an employer plan or not.
2006-12-20 02:38:32 · answer #5 · answered by Master M 3 · 0⤊ 0⤋
Here is what the IRS says about IRAs of both stripes. With your income, you seriously can't afford to max out both, even if it were permitted.
2006-12-20 02:51:27 · answer #6 · answered by Rabbit 7 · 0⤊ 0⤋
Yes as long as they don't exceed 4,000 between all the accounts combined.
2006-12-20 02:28:00 · answer #7 · answered by Anonymous · 0⤊ 0⤋