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Hello All - Inculdes a Roth question
Old 03-28-2012, 10:53 AM   #1
Confused about dryer sheets
Join Date: Nov 2010
Location: Wisconsin
Posts: 2
Hello All - Inculdes a Roth question

Well its about time I introduce myself, been lurking on here for the past few years.

I work in Wisconsin as an Engineer (Mechanical) and keep a second part time j*b as a holdover from my college days. I have been more of a saver than an investor in my earlier days but am branching out more each year, just turned 27.

My company introduced a Roth 401k last year and I've been participating at a low level. Now I am thinking about openning a Roth IRA as well.

Gross Income is ~65k, expenses including Grad school tuition (going for a 2nd Masters) average 25k over the last 3 years.

AA in 401k's
25%-Large Cap Index
20%-Mid Cap
20%-Small Cap

4k-Roth 401k

My question that I am having a hard time finding the answer to is the balance of contruting to a Roth 401k and Roth IRA - what limits are there for combined contribution, if any? Also, if I open a Roth IRA account before April 17th can I just contribute 10k to cover both 2011 and 2012?

Look forward to your answers and I hope this kick starts me to be more active on the boards.

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Old 03-28-2012, 11:08 AM   #2
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ronocnikral's Avatar
Join Date: Apr 2010
Posts: 852
hello 27 yo old soul. You are allowed $17k for a total contrution to a 401k plan. If offered a Roth options, you can have any allocation you would like between Roth and Traditional.

Also, I would do the IRA as two separate contributions. $5k making clear it is for the prior tax year and $5k showing for this year. I don't see any issue with making these contributions on the same day, but I would go through the exercise with your broker twice just to make sure they don't screw it up. They may be able to handle it, but doing it twice is better than dealing with excess contributions.


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Old 03-28-2012, 11:11 AM   #3
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Welcome to the site. 401k contribution limits are counted separately from IRA limits. Check with your employer for the limits for your 401k.

As to contributing to a Roth before April 17th for 2011 and 2012 I would do it as 2 transactions.

I would guess all brokerages keep a track of which year your contributions are for.

With VG and Fido, if I remember correctly, when you make the contribution you are asked to which year the contribution is for. If >$5k you may be asked how to split it, but I'm not sure if the software allows a split like that.
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Old 03-29-2012, 09:00 AM   #4
Confused about dryer sheets
Join Date: Nov 2010
Location: Wisconsin
Posts: 2
Thanks for the response, I what thinking that two transactions would be the safer route. I am glad that the 401k and IRA are under separate limits, at least that means I can put away 22k combined for 2012.
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