Originally Posted by
RedeyeAV8r
Toilet Duck I know the difference between an IRA and 401.
You cannot open an 401K for yourself .....Unless you have your own business. If you have your own business than you can open what is called a
"SEP-401k" which is similar to what is called a SEP-IRA.
The maximum deposit limits are higher than a regular IRA or Roth IRA per IRS codes.
If you (or your Brother in Law) has their own business than yes you can open a SEP-401K. Your average Joe who works for Brand X making widgets cannot open up his/her personal 401.
I read it both times lol. I guess the 401k for your own business is what i'm looking at because I have myself set up as one and so do my parents for legal reasons. That must be the difference. When I've been researching all over they've never pointed that out. But I know they have one and that must be how they've done it. I am still a touch confused over why they'd cap the IRA then or not make it equal to a 401k. However that part doesn't matter since I can't max it out anyway lol.
PS. What happens when you leave one company and go to another? Does your 401k xfer? I noticed on TD waterhouse they give me the option to roll the 401k into the IRA however what if you have 10k in your 401k does it cap your IRA which is 3k(guessing on the IRA limit)? Or do they just simply dump that money into the IRA since they operate under the same rules?