| Author |
Message |
Guest
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 Posted:
Mon Nov 07, 2005 1:00 am Post subject:
Can I have more than one IRA? |
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|
From what I have read an IRA can only have up to $3000 a
year put in it. I am 35 so that doesn't give me a ton of
money by 65, only 400k - 500k. Can I have more than one IRA
to make more money or am I "supposed" to do something else
to invest my money? Thank you.
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Phil Marti
Guest
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| Posted:
Mon Nov 07, 2005 9:00 am Post subject:
Re: Can I have more than one IRA? |
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|
<needin4mation@gmail.com> wrote:
| Quote: | From what I have read an IRA can only have up to $3000 a
year put in it.
|
You need to update your reading. The 2005 limit is $4,000.
See IRS Publication 590.
| Quote: | I am 35 so that doesn't give me a ton of
money by 65, only 400k - 500k. Can I have more than one IRA
to make more money or am I "supposed" to do something else
to invest my money?
|
You can have any number of IRA accounts, but your annual
contribution is as stated in the Pub, regardless of how many
accounts you have. With today's tax treatment of dividends
and long-term capital gains, a regular investment account
holding long-term stocks or tax-managed mutual funds is a
good spot.
--
Phil Marti
Clarksburg, MD
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<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
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<< Copyright (2005) - All rights reserved. >>
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Herb Smith
Guest
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| Posted:
Mon Nov 07, 2005 9:00 am Post subject:
Re: Can I have more than one IRA? |
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|
needin4mation@gmail.com wrote:
| Quote: | From what I have read an IRA can only have up to $3000 a
year put in it.
|
You stopped reading too soon, the current annual limit
(scheduled to increase in 2006) is $4,000 per year. That
limit will be increased for inflation periodically, so
surely won't be the same for the next 30 years.
BTW, that annual contribution limit applies to ALL IRAs you
own, traditional and/or Roth.
| Quote: | I am 35 so that doesn't give me a ton of
money by 65, only 400k - 500k.
|
Depends on your investment choices and results. Nothing is
guaranteed.
| Quote: | Can I have more than one IRA to make more money
|
You can have more than one account if you want, but your
annual contributions are still limited (currently) to a
TOTAL of $4,000 per year.
| Quote: | or am I "supposed" to do something else to invest my money?
|
Yup. Nobody says you can't have taxable accounts to save and
invest your money in.
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2005) - All rights reserved. >>
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Barry Margolin
Guest
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| Posted:
Mon Nov 07, 2005 9:00 am Post subject:
Re: Can I have more than one IRA? |
|
|
needin4mation@gmail.com wrote:
| Quote: | From what I have read an IRA can only have up to $3000 a
year put in it. I am 35 so that doesn't give me a ton of
money by 65, only 400k - 500k. Can I have more than one IRA
to make more money or am I "supposed" to do something else
to invest my money? Thank you.
|
You can have as many IRA accounts as you want, but the
combined contributions to all of them is limited to $3,000
per year.
If your employer has a 401K, you can invest in that, and the
current limit is $13K/year, plus your employer may provide
some matching contributions on top of that.
Another tax-deferred investment mechanism is annuities.
These are mutual fund-like investments offered by insurance
companies. The main drawback to them is that they generally
have higher fees than ordinary mutual funds.
--
Barry Margolin, barmar@alum.mit.edu
Arlington, MA
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2005) - All rights reserved. >>
<< ======================================================= >> |
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Harlan Lunsford
Guest
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| Posted:
Mon Nov 07, 2005 9:00 am Post subject:
Re: Can I have more than one IRA? |
|
|
needin4mation@gmail.com wrote:
| Quote: | From what I have read an IRA can only have up to $3000 a
year put in it. I am 35 so that doesn't give me a ton of
money by 65, only 400k - 500k. Can I have more than one IRA
to make more money or am I "supposed" to do something else
to invest my money? Thank you.
|
ONLY 400-500k? Well, that's a pretty good chunk of change
for your older years, at which time you'll not need the same
level of income to spend for basic needs. And there will
also be social security benefits.
Remember also that after age 50 you may contribute even
more.
ChEAr$,
Harlan Lunsford, EA n LA
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2005) - All rights reserved. >>
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JanZtax@aol.com
Guest
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| Posted:
Mon Nov 07, 2005 9:00 am Post subject:
Re: Can I have more than one IRA? |
|
|
First of all, the maximum IRA contribution for 2005 is
$4,000. Secondly, other plans available to you would depend
on whether you're working as an employee or are
self-employed. If you're an employee, your workplace may
offer a tax deferred plan such as a 401K or 403b. If you're
self-employed, there are a number of other plans available.
Lastly, tax-deferred retirement plans may not be the best
way to save money for retirement. With today's historically
low tax rates and the current advantageous treatment of
capital gains, you may actually pay more tax later by
contributing to a tax deferred account today. (the
exception, of course, is the Roth IRA, where distributions
aren't tax deferred but tax free)
Jan Zobel EA
Oakland, CA
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2005) - All rights reserved. >>
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joetaxpayer
Guest
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| Posted:
Mon Nov 07, 2005 9:00 am Post subject:
Re: Can I have more than one IRA? |
|
|
needin4mation@gmail.com wrote:
| Quote: | From what I have read an IRA can only have up to $3000 a
year put in it. I am 35 so that doesn't give me a ton of
money by 65, only 400k - 500k. Can I have more than one IRA
to make more money or am I "supposed" to do something else
to invest my money? Thank you.
|
The IRA limit this year is $4000. This limit is for all IRA
deposits for 2005. An important point, since you may, in
fact, have multiple IRAs for many reasons (maybe a
deductible IRA, a nondeductible, and a ROTH) each of which
has different income restrictions for eligibility.
Do you work for a company which offers a 401(k)? Limit this
year is $14,000 going to $15,000 next year.
You are right, an IRA for an aggressive saver or person of
higher income, is not enough to fund one's retirement. But
as you calculated, $400-$500K is nothing to sneeze at.
JOE
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2005) - All rights reserved. >>
<< ======================================================= >> |
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Andy
Guest
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| Posted:
Wed Nov 09, 2005 9:00 am Post subject:
Re: Can I have more than one IRA? |
|
|
From what I have read an IRA can only have up to $3000 a
year put in it. I am 35 so that doesn't give me a ton of
money by 65, only 400k - 500k. Can I have more than one IRA
to make more money or am I "supposed" to do something else
to invest my money? Thank you. ---needin4mat
Andy replies:
You can have many IRAs. The contribution limit does not
change, however.
Having many IRAs is a good idea, since there is a limit to
the amount of insurance that a bank or brokerage has on each
account. And it is a lot less than 500K.
In my opinion, your IRA should be bulletproof, since when
you finally need it, it had BETTER be there. At that point
in your life, you will probably be too old, or too burned
out, to start over.....
I suggest you find the insurance limits of each brokerage
house or bank, and tailor your accounts to never exceed
these amounts.
Remember, the insured account INCLUDES interest credited to
the account, and in 30 years that will be a hell of a lot of
interest...... So, when you get near the insurance limit,
stop contributing there and periodically transfer amounts
into another IRA account. Don't go past the insured
limits....
One method is to use a brokerage house like Smith Barney to
make sure all of your dough goes into separate FDIC insured
institutions.
Andy
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2005) - All rights reserved. >>
<< ======================================================= >> |
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NewYorker
Guest
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| Posted:
Wed Nov 09, 2005 9:00 am Post subject:
Re: Can I have more than one IRA? |
|
|
<needin4mation@gmail.com> wrote:
| Quote: | From what I have read an IRA can only have up to $3000 a
year put in it. I am 35 so that doesn't give me a ton of
money by 65, only 400k - 500k. Can I have more than one IRA
to make more money or am I "supposed" to do something else
to invest my money? Thank you.
|
You could have as much IRA accounts as you want but your
yearly contribution can't be more than the yearly limit.
There are other retirement account also, such as 401K which
has a limit of apprx $13,000 annually (google for the exact
amount).
Just my personal opinion.
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2005) - All rights reserved. >>
<< ======================================================= >> |
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Andrew
Guest
|
| Posted:
Wed Nov 09, 2005 9:00 am Post subject:
Re: Can I have more than one IRA? |
|
|
needin4mation@gmail.com wrote:
| Quote: | From what I have read an IRA can only have up to $3000 a
year put in it. I am 35 so that doesn't give me a ton of
money by 65, only 400k - 500k. Can I have more than one IRA
to make more money or am I "supposed" to do something else
to invest my money? Thank you.
|
There's no limit to the NUMBER of IRAs you have, but there
*are* limits to the TOTAL amount of money you can place in
ALL of them combined in any particular year. A number of
web sites will give you the basics - here's one:
www.turbotax.com/articles/FAQontheTraditionalIRA.html .
But I wonder where you got your figures about how much money
you'll end up with in 30 years. A quick calculation to end
up with $400,000 with a yearly contribution of $3,000 (at
10% annual compounding which is a pretty decent rate of
return, one might suggest) yields the fact you'd need to
ALREADY have over $46,000 in your account to start with!
Take it another way, same 10% yield, no starting balance.
You'd need to contribute almost $8,000/year to end up with
$400,000 at the end of 30 years starting from $0. (I do
hope my calculator is working okay here....)
My point is to also consider other ways to fund your
retirement besides IRAs! A good start, but not complete.
--
-------------------------------------------------------------
Regards -
- Andrew
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2005) - All rights reserved. >>
<< ======================================================= >> |
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Victor Roberts
Guest
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| Posted:
Wed Nov 09, 2005 9:00 am Post subject:
Re: Can I have more than one IRA? |
|
|
| Quote: | From what I have read an IRA can only have up to $3000 a
year put in it. I am 35 so that doesn't give me a ton of
money by 65, only 400k - 500k. Can I have more than one IRA
to make more money or am I "supposed" to do something else
to invest my money? Thank you.
|
You are certainly allowed to save and invest as much of your
money as you want to. However, you can only get
tax-preferred treatment for the limited amounts set by the
various types of IRA's. (I'll let the pros discuss the many
different types of IRA's.)
--
Vic Roberts
Replace xxx with vdr in e-mail address.
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2005) - All rights reserved. >>
<< ======================================================= >> |
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Vic Dura
Guest
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| Posted:
Wed Nov 09, 2005 9:00 am Post subject:
Re: Can I have more than one IRA? |
|
|
Barry Margolin <barmar@alum.mit.edu> wrote:
| Quote: | You can have as many IRA accounts as you want, but the
combined contributions to all of them is limited to $3,000
per year.
If your employer has a 401K, you can invest in that, and the
current limit is $13K/year, plus your employer may provide
some matching contributions on top of that.
|
Is the $13k allowed in the 401K in addition to the $3k ($4k
in 2005) allowed in the IRA?
--
To email me directly, remove CLUTTER.
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2005) - All rights reserved. >>
<< ======================================================= >> |
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joetaxpayer
Guest
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| Posted:
Wed Nov 09, 2005 9:00 am Post subject:
Re: Can I have more than one IRA? |
|
|
Barry Margolin wrote:
| Quote: | needin4mation@gmail.com wrote:
From what I have read an IRA can only have up to $3000 a
year put in it. I am 35 so that doesn't give me a ton of
money by 65, only 400k - 500k. Can I have more than one IRA
to make more money or am I "supposed" to do something else
to invest my money? Thank you.
You can have as many IRA accounts as you want, but the
combined contributions to all of them is limited to $3,000
per year.
If your employer has a 401K, you can invest in that, and the
current limit is $13K/year, plus your employer may provide
some matching contributions on top of that.
Another tax-deferred investment mechanism is annuities.
These are mutual fund-like investments offered by insurance
companies. The main drawback to them is that they generally
have higher fees than ordinary mutual funds.
|
Barry, spring ahead a year, you quoted 2004 limits.
2005 = $14000 for 401(k) and $4000 for IRA
OP is 35, but for over 50, the 401 had extra 'catch-up' of
$4000, and IRA, $500.
With a myriad of changes proposed, OP should take advantage
where he can and look forward to new plans allowing higher
savings.
JOE
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2005) - All rights reserved. >>
<< ======================================================= >> |
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rick++
Guest
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| Posted:
Wed Nov 09, 2005 9:00 am Post subject:
Re: Can I have more than one IRA? |
|
|
1) The contribution is $4000 per year. It jumps $500 every
every COLA acumulates an equivalent percentage.
2) Historically you should increase you money about 15 times
in 30 years just parking in a market index fund.
3) They are many alternatives for tax-deferred savings-
401Ks, index funds (they rarely sell their contents),
real estate, insurance annuities ...
4) Its likely the US government will reform tax-deferred or
tax-free savings accounts in the not too far future. The
idea idea is to simplify the current mess of a dozen kind
of such accounts in to one kind with some sort of large
annual limit.
5) Saving and investing after taxes isnt a bad idea too.
6) In 30 years retirement age will be increased to at least
69, so you will have time to save more!
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2005) - All rights reserved. >>
<< ======================================================= >> |
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Victor Roberts
Guest
|
| Posted:
Wed Nov 09, 2005 11:57 pm Post subject:
Re: Can I have more than one IRA? |
|
|
"Andrew" <andrew@jkl.com> wrote:
| Quote: | needin4mation@gmail.com wrote:
From what I have read an IRA can only have up to $3000 a
year put in it. I am 35 so that doesn't give me a ton of
money by 65, only 400k - 500k. Can I have more than one IRA
to make more money or am I "supposed" to do something else
to invest my money? Thank you.
There's no limit to the NUMBER of IRAs you have, but there
*are* limits to the TOTAL amount of money you can place in
ALL of them combined in any particular year. A number of
web sites will give you the basics - here's one:
www.turbotax.com/articles/FAQontheTraditionalIRA.html .
But I wonder where you got your figures about how much money
you'll end up with in 30 years. A quick calculation to end
up with $400,000 with a yearly contribution of $3,000 (at
10% annual compounding which is a pretty decent rate of
return, one might suggest) yields the fact you'd need to
ALREADY have over $46,000 in your account to start with!
Take it another way, same 10% yield, no starting balance.
You'd need to contribute almost $8,000/year to end up with
$400,000 at the end of 30 years starting from $0. (I do
hope my calculator is working okay here....)
|
Well, your calculator may need new batteries. I'm using an
HP financial calculator (the one built into the HP 200LX)
with the following assumptions:
Number of periods = 30
Annual Interest = 10%
Present Value = $0
Payment = $3000
Payments per Year = 1
Begin/End Mode = End
This gives a Future Value of $493,482.07
--
Vic Roberts
Replace xxx with vdr in e-mail address.
<< ======================================================= >>
<< The foregoing is intended for educational purposes only >>
<< and does NOT constitute legal OR professional advice. >>
<< >>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org. >>
<< Copyright (2005) - All rights reserved. >>
<< ======================================================= >> |
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