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What do I need to know about contributing money to an IRA vs. a 401(k)? Also, I thought that if I have a 401(k) plan at work that I could not contribute to an IRA as well. -- J.K.
Welcome to Retirement SavingsWe all know that saving for retirement is a very big deal, but let's face it: Retirement accounts can be intimidating. With no fewer than 11 different kinds of IRAs out there, it can be compelling to just put off setting up your retirement accounts for another day. That's a mistake, according to Stuart Ritter, a
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Why Retirement Accounts MatterThere's saving for a rainy day, and then there's saving for retirement. While you should do both (see "
Where to Put Your MoneyFiguring out which type of account to use is easier than you may think. Ritter explains: "If you're making a decision on where to put your retirement money, first and foremost save in your employer's 401(k) plan to the match. Then, if you're under age 50 (or over 50 but don't think your
IRA ConversionsThere will be times when it makes sense to convert a traditional IRA to a Roth IRA, or vise versa. If this is the case, know that it's never too late to make a conversion, even if you're already old enough to receive your required minimum distributions (RMDs). If a conversion makes sense to you, and you're thinking of converting to a Roth, it's worth marking your calendar for 2010. That's because it's the year that you'll be able to convert a traditional IRA to a Roth IRA even if you wouldn't be qualified for the Roth account. It's something worth looking into for your own situation. One of the easiest ways to figure out if a conversion is right for you is by checking out some of the online
Think Amount and AccountAs important as selecting the right retirement account is, Ritter offers investors a word of advice: "How much you contribute has a much greater impact on your success than which account you're using."
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