Increase 401k contribution or open an IRA?
September 18, 2011 7:35 PM Subscribe
I don't know know anything about saving for retirement other than that you're supposed to do it. I've been trying to educate myself by reading blogs like Get Rich Slowly, but I'm still confused about what I should be doing (if anything) beyond my 401k.
posted by anonymous to Work & Money (6 answers total) 18 users marked this as a favorite
My employer contributes a percentage of my annual salary to a 401k (regardless of employee contributions), and matches a small amount on top of that. I've been putting in 10% of my salary into a traditional 401k. To give some nice, round hypothetical numbers, let's say that I make $50k a year and currently have $100k in my traditional 401k. My workplace offers a Roth 401k, so I just filled out paperwork to change my contributions from traditional to Roth. I want to save some more money -- should I put it into the 401k, or open an IRA?
Here are some facts:
I'm single, but I live with my boyfriend and we've been talking about getting married (but it won't be in the next year).
Most of my 401k is in one of those target retirement year funds (and 100% of my new contributions go to that fund) -- I had some other funds, but they were eliminated from our plan and they defaulted to the retirement year account.
If I open an IRA:
Should I open a Roth IRA and continue to make traditional contributions to my 401k rather than the Roth 401k? Or both Roth? I know that if I think I'll be in a higher tax bracket at retirement, I should pick Roth, but how the heck would I know that?
Should I avoid the retirement year funds, since my 401k is in one of those types of funds?
Should I open one through my 401k provider (T Rowe Price), or Vanguard, or Fidelity?