by: jenniferquilter
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Date: Wed, 23 Jun 2010 Time: 1:24 PM -
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Reaching your maximum contribution level on your retirement savings accounts is a great way to ensure you'll have enough money in retirement. These numbers change every year so staying on top of this information is essential.
Article Source: DirectoryArticles.com
The Roth IRA limits for 2010 are $5,000. This is the same number for a traditional independent retirement account as well. If you're between the ages of fifty and fifty nine and a half years of age you also have the option of an additional $1,000 catch-up contribution.
If you are one of the people who is very on top of their financial options and have both a traditional and Roth independent retirement accounts you should be aware that the Roth IRA limits for 2010 mentioned above are for both of your accounts. This means that you can only contribute $5,000 between any independent retirement accounts you have for the year.
You can, however, contribute additional funds to a 401k if you have one as well. The limits this year for 401ks are at $16,500, with an additional $5,000 catch up contribution. If you have both independent and employer retirement accounts it's wise to contribute up to the point of your 401k contribution match from you employer and then contribute from there to either your independent account to diversify, or additionally to your 401k.
Keep in mind that your Roth IRA contributions are from your income after taxes are taken out, and are therefore not tax deductible like your traditional 401k or independent retirement account contributions. This also means that you won't be paying taxes on this income when you make withdrawals in retirement.
This may seem like a lot to keep in mind, but it's good to have the facts laid out when you're looking at how to distribute your savings for your retirement accounts. Reaching the Roth IRA limits for 2010 is a great way to save enough for retirement and stay in control of your investment options.
Retirement accounts don't have to be so confusing. Learn more about your retirement savings options, like what the IRA and 401k maximum contribution limits are, what your account balance goals should be, and look at Roth vs Traditional IRA plans.
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