Counting Against the 15%

Dan just made it to Baby Step 4 and wonders if the money he contributes to his 401(k) counts against the money he can contribute to his Roth IRA.

QUESTION: Dan just made it to Baby Step 4 and wonders if the money he contributes to his 401(k) counts against the money he can contribute to his Roth IRA.

ANSWER: No it does not. You can fully fund a Roth IRA and fully fund a Roth 401(k). They do not step on each other.

I recommend at Baby Step 4 that you don’t put more than 15% of your total income into retirement. Multiply your household income by 0.15 then put that 15% in there. That’s $15,000 per $100,000 of income that is going somewhere into some kind of retirement plan, be it a Roth 401(k), Roth IRA, a 401(k) or something like that.

Jump-Start Your Goals!

Jump-Start Your Goals!

Get our 8-Day JUMP START series and weekly newsletter that are packed with articles and tools to help you win with money.

Reach Your Money Goals

Reach Your Money Goals

Start with a budget. Join the millions already budgeting with EveryDollar!

Create My (FREE) Budget

Thank You!

Your 8-Day Jump Start is on its way to !