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Roth IRA vs. 401k

Old 01-05-2007, 04:38 PM
  #21  
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Originally Posted by RedeyeAV8r View Post
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?
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Old 01-05-2007, 05:26 PM
  #22  
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Goodness gracious! I come back from dinner to find more questions! I ought to start charging you. hee hee. You really should move from Del Rio, meet people, and stop eating at the Whataburger (I'll be sure to try it though when I am in SAT later this month).

First of all, try to separate a 401(k) from an IRA. They are different. Even an SEP IRA is not a 401(k). The maximum allowable contributions are set by Congress, which enacted these laws at different times for different purposes.

If you have a legitimate 401(k) plan from an employer and you leave that employer, you can and should ROLLOVER the money to a Rollover IRA. You have to open a new account and specify that is is a Rollover. Meaning, do not mix that money with your Traditional IRA, for example.

Any other questions?
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Old 01-05-2007, 07:18 PM
  #23  
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Nope that's about it! lol. Can't blame a guy for trying to nail it all down before he jumps on the wagon at a regional. Too many people don't bother thinking about these things before they make a move. And since I can't find that "real money" book anywhere in Del Rio I'm just hittin gyou up here. Put a paypal icon on your sig.
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Old 01-05-2007, 09:28 PM
  #24  
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Questions about money, investing or legal interpretations I can answer. I just hope you don't ask us to help you find a wife or something. I'll have to defer to my friend calcapt for that.
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Old 01-06-2007, 05:37 AM
  #25  
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Not only can you rollover your 401K to a rollover IRA when going from one job to another, you can also rollover those funds to the new employer's 401K, assuming they offer one. An HR person from either company should be able to give the details on how to accomplish this.
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Old 01-06-2007, 07:47 AM
  #26  
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[QUOTE=aero550;99632]Not only can you rollover your 401K to a rollover IRA when going from one job to another, you can also rollover those funds to the new employer's 401K, assuming they offer one. An HR person from either company should be able to give the details on how to accomplish this.[/QUOTE

That's good to know. Thanks for all the info.
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Old 01-06-2007, 07:49 AM
  #27  
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Originally Posted by vagabond View Post
Questions about money, investing or legal interpretations I can answer. I just hope you don't ask us to help you find a wife or something. I'll have to defer to my friend calcapt for that.
I don't need any help there's plenty of high schools to troll around here j/k
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Old 01-06-2007, 01:15 PM
  #28  
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Duck, don't make me have a talk with your Mom! High school girls indeed!
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Old 01-06-2007, 03:58 PM
  #29  
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I must say while most of the information on this forum is accurate as regards flying the accuracy of investment advice is variable to say the least. Unless you're licensed as an investment adviser (as I am) you should really leave the investment advice to the professionals and not take or give advice from people without a license. It would take far too long (book length) to describe all the different types of qualified plans (Defined Benefit, Defined Contribution, IRAs (Roth, Traditional, Rollover, Deductible), SEPs, SIMPLEs, Keoughs, Profit Sharing, and that's just the short list). In addition, they each have different limits, different qualifying amounts, different matches (if any). While most people (especially pilots) think they can do it themselves most people are no better at being their own financial adviser than they are at being their own doctor - there are many studies proving that most people end of being late to get in (buying high) and late to get out (selling low) which results in very poor results. And getting a good financial adviser means he does more than just advise you on your portfolio.

Just my $.02 from a licensed professional (5 years in the business after 26 years flying).
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Old 01-06-2007, 05:35 PM
  #30  
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Thanks for your post, even though the "advice" is no more substantive than all others already posted. The purpose of these forums is a healthy exchange of help and ideas. There are the usual posers, trolls, idiots and morons here, but for the most part, people genuinely want to help.

If you have something positive to contribute, I hope you do so. We are here to learn from each other.
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