Hello and welcome to Moneygirls quick and dirty tips for a richer life.

Today I'm covering two short topics

listeners have asked about, employer contributions to a 401k

and some more information about self-directed IRAs.

Al called in with this question about 401k limits.

Hi, my name is Al, and I was listening to the Money Podcast.

I had a question about contribution limits to a 401k, I understand to be $15,500.

If my employer matches part of my contributions, is the limit amount just on what I contribute or is what I contribute

plus what the employer contributes?

Thanks for the question, Al. First off, you've got it right. The contribution limit for a 401k for 2007 is $15,500, which is $500 more than it was last year.

The limit applies to your contributions only. Employer

matching doesn't factor into the limit. So if you were to max out your 401k for

2007 by contributing a full $15,500 and if your employer were to match the first

ten thousand dollars you contributed at a rate of 50 cents on the dollar, you'd have a grand total contribution of $20,500 for the year.

The 15,500 you contributed plus the $5,000 employer match.

As I mentioned in episode 4, if your employer matches your contributions, it's a really, really

smart idea to contribute enough to your 401k to get that full employer match.

Now for a different question.

In response to episode 7 about self-directed IRAs,

listeners named David and George posted to the blog

wondering whether it's possible to purchase your own home

or a vacation home with your self-directed IRA.

...