131 - What to Know About IRA Eligibility

Scott and James discuss what to know about IRA eligibility. Listener Question Question 1: I am wondering if I should open an IRA in addition to my 401k through work. My employer match in my 401k caps at $9,000. The only benefit I see of having an IRA is being able to direct the investments, but we are currently happy with the options offered by our employers. We prefer investing in ETFs and have a majority of our money in the S&P; 500, with some diversification globally and in small/mid cap funds. I am 29 and my husband is 32. We both work in corporate jobs and have a combined income of nearly $300,000 with an additional $100,000 in bonuses, stock, and matching incentive pay. I have always operated of a mindset of 1/3 savings, 1/3 spending, and 1/3 taxes. We each max out our 401k’s (traditional), participate in employer stock purchase plans, and have a 529 plan for future college funds. The rest of our assets are in taxable brokerage accounts. We would like the flexibility to retire from corporate jobs in our 50’s. At some point, we may want to open our own small business. Question 2: I have a 401(k) with my current employer. If I were to get a new job (that also offers a 401k) should I roll my 401(k) into a new one with my new employer, or should I roll my 401(k) into a Roth IRA, and start a new 401(k) from scratch with my new employer? Someone told me this could be a good idea, but I have NO CLUE about investing and such so I’m not sure if this is a wise decision. PS. Please let me know if you include my answer on your show so I know when to listen! Thanks! Planning Points Discussed Retirement Planning Utilizing Time Efficiently Capital Appreciation Purchasing Power Other issues (IRAs, Inflation, Financial Goals, etc.) Timestamps: 3:57 - Income Limits 6:02 - Backdoor Roth Conversions 11:08 - Flexibility, Control, Investment Options 14:32 - Tax Planning 18:21 - Excess Contributions 18:50 - Traditional IRA Contributions 20:04 - Roth IRA Contribution Limits 24:08 - Aligning Your Financial Goals LET'S CONNECT! James Facebook LinkedIn Website Scott Facebook Twitter Website ENJOY THE SHOW? Don’t miss an episode, subscribe via iTunes, Stitcher, Spotify, or Google Play.<