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Roth/Roth401K/401K Contribution Limits
Old 09-20-2015, 07:34 AM   #1
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Roth/Roth401K/401K Contribution Limits


I was wondering if I am allowed by IRS to do the following:

W*rking part-time married filing jointly over 50.

Contributed to Roth IRA $6500
Contributed to Roth 401k $6500

Remaining contributions to 401K to the allowed limits ?



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Old 09-20-2015, 08:53 AM   #2
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Yes, that's allowed.

IRA Combined Limit: 5500 + 1000 catch-up
401k Combined Limit: 18000 + 6000 catch-up

As long as your total IRA and 401k contributions don't exceed 6500 and 24000 respectively, you can choose any combination of traditional and Roth that you want.

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Old 09-20-2015, 11:01 AM   #3
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Also, your AGI for Married filing jointly must be less than 183,000 (the IRA limit phases out between that and 193,000). Amount of Roth IRA Contributions That You Can Make For 2015
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Old 09-20-2015, 11:56 AM   #4
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Also, the amount you invest in a 401K and IRA can't be more than your part-time work earnings.
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Old 09-20-2015, 12:25 PM   #5
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Originally Posted by Al18 View Post
Also, the amount you invest in a 401K and IRA can't be more than your part-time work earnings.
401k can't exceed your individual gross income but as far as I'm aware, IRA is limited based on combined spousal income if married filing jointly. Even if only one spouse worked and earned, say $50K, both spouses can contribute $5500 each ($6500 if age 50 or older) to an IRA so total of $11-13K. I prefer the Roth IRA route over Roth 401k if possible as it offers a greater degree of flexibility.

Not sure how much you're earning part time but standard deduction + exemption for MFJ is $20K (0% tax). Next $18K ($38K gross) is just at 10% and the next $56K ($95K gross) at 15%. I'd probably just contribute enough to tax deferred accounts until regular income (wages, interest, etc) + LTCG/qualified dividends reaches one of those notch points and put the rest in Roth (IRA first then 401k).
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Old 09-20-2015, 02:24 PM   #6
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If you are working as a non-w2, pay attention to the 25% match vehicles you can use, depending on your incorporation type or lack of. That's where the real savings power is, the individual contribution is only a third of the total you might be able to save.

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