What is a 401k IRA?
There is no real set account that is a 401k IRA but you can have a 401k as well as an Ira as well as you can convert your 401k into an IRA.
The combination is not only limited to a 401k retirement plan either and you can use any other retirement plan but for the purpose of this article we will speak about the 401k IRA.
Gone are the days when persons rely just on their pensions and social security checks.
Nowadays people are seeking more and more ways to invest in their post retirement future.
With the rising costs of everything persons have to make sure that they save more and invest their savings into higher yielding investments than before.
It is because of this that persons are now venturing into opening IRA's.
Even those who have regular retirement plans are still trying to save more by having both a 401k and an IRA.
Some persons have them both in one by transferring the money from their 401k, they call this the 401k IRA but there is no need to give it a different name as it is really just an IRA account that has funds from a 401k.
The reasons more persons choose IRA's and 401k's over the other retirement savings options is because these are the most majorly known programs.
They were once used mostly by persons who worked for establishments that did not provide any type of pension program, but over the years as income limits have risen, more and more people, even those who have pension plans have started to open 401K IRA's.
If you can fund both of these then that is an excellent choice, in the event that you can't you can rollover your 401k into an IRA account.
Either way you will be making a great investment into your post retirement future with either one of these accounts or both.
If you are in such a position that you can contribute to both of those programs and would still like to save more you can invest in a brokerage account or you can make a contribution to the traditional IRA.
You may be now asking the question "how can I make a contribution if I have already made my maximum contribution to the Roth IRa?" The answer is to make a non deductible contribution.
The drawback to this is that when you are good and ready to receive these funds they will be taxable as regular income so you should consider this option well before making your choice.
The bottom line is that there is really no one account that is called a 401k IRA.
Persons use this term to refer to a 401k that has been converted into an IRA.
This is becoming a popular choice with persons these days as they strive to ensure that they will have enough money to take care of themselves and their families once they retire.
The combination is not only limited to a 401k retirement plan either and you can use any other retirement plan but for the purpose of this article we will speak about the 401k IRA.
Gone are the days when persons rely just on their pensions and social security checks.
Nowadays people are seeking more and more ways to invest in their post retirement future.
With the rising costs of everything persons have to make sure that they save more and invest their savings into higher yielding investments than before.
It is because of this that persons are now venturing into opening IRA's.
Even those who have regular retirement plans are still trying to save more by having both a 401k and an IRA.
Some persons have them both in one by transferring the money from their 401k, they call this the 401k IRA but there is no need to give it a different name as it is really just an IRA account that has funds from a 401k.
The reasons more persons choose IRA's and 401k's over the other retirement savings options is because these are the most majorly known programs.
They were once used mostly by persons who worked for establishments that did not provide any type of pension program, but over the years as income limits have risen, more and more people, even those who have pension plans have started to open 401K IRA's.
If you can fund both of these then that is an excellent choice, in the event that you can't you can rollover your 401k into an IRA account.
Either way you will be making a great investment into your post retirement future with either one of these accounts or both.
If you are in such a position that you can contribute to both of those programs and would still like to save more you can invest in a brokerage account or you can make a contribution to the traditional IRA.
You may be now asking the question "how can I make a contribution if I have already made my maximum contribution to the Roth IRa?" The answer is to make a non deductible contribution.
The drawback to this is that when you are good and ready to receive these funds they will be taxable as regular income so you should consider this option well before making your choice.
The bottom line is that there is really no one account that is called a 401k IRA.
Persons use this term to refer to a 401k that has been converted into an IRA.
This is becoming a popular choice with persons these days as they strive to ensure that they will have enough money to take care of themselves and their families once they retire.
Source...