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The Short Answer

A Look Inside the 401(k) Mailbag

We answer reader questions on maxing out Roth retirement accounts, the rules regarding aftertax contributions, and more.

A recent Short Answer column on 401(k) matches brought out a host of new 401(k) questions from readers. So let's dip into the Short Answer mailbag and answer a few:

I am 58 and have not saved much for retirement. In 2013, I want to max out my Roth 401(k) contributions of $23,000 and contribute $6,500 to an individual Roth IRA, thus saving a total of $29,500 for my retirement. Can I do both?
As a matter of fact you can. Anyone can max out contributions to both a work-sponsored retirement plan such as a 401(k) and to an individual retirement account, or IRA, in the same year. For 2013 the limits on individual contributions are $17,500 for 401(k)s and similar plan types and $5,500 for IRAs. (Income limits apply to Roth and deductible traditional IRA contributions.) But because you are 50 or older, you qualify for catch-up contributions, which means you can add an extra $5,500 to your 401(k) and an extra $1,000 to your IRA for a grand total of $29,500.

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