Question about 401K and company match

[vulcanman]

Right now I put 12% of my income in a 401K ... the company matches 50% up to the first 8%

During a recent research I found out that the asset management fees are outrageous. The only reason I contribute is because of that 50% match.

Now, I have my own traditional (rollover) IRA account.

If I put only 8% into my 401K .. can I put the other 4% into my traditional IRA ? If so, how and when do I get the benefit of the tax deferral.

The other option is to put the 4% into my Roth IRA account. I do want to max out till the contribution limits for both traditional and roth IRA.

Any thoughts ?

Thanks.

 

[FoBoT]

i agree do the 8%

if you are "young" , then max your Roth next

 

[alrocky]

IRA info

Income

"$4,000 for tax years 2006?2007"

You can invest as much as $4,000 for your 2006 and another $4,000 in your 2007 IRAs. You have until April 16, 2007 to do your 2006 IRA.

 

[vulcanman]

Thanks all ... did find exactly what I was looking for at Charles Schwab ...

http://tinyurl.com/3ydchq

 

[dud]

DO NOT forget to put AS MUCH after tax dollars into a ROTH IRA. The money has already been taxed and any interest you earn (for retirement use) is TAX FREE!

 

[erub]

I'm pretty sure that you can't fund both a Roth and a Traditional IRA, its one or the other, up to 4K for 2006 & 2007 and 5K for 2008.

 

[CTrain]

As other have said.

1) Put the 8% in 401K.
2) Max out your ROTH at $4000 for the year. In fact you can still contribute the $4K for 2006.

You can put either $4K into ROTH or traditional IRA not both.