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

Today's topic, to the max. Jonathan in New Jersey called in with this question

about the maximum contribution limits for a Roth IRA and a Roth 401k.

Hey money girl, this is Jonathan.

I am really enjoying your podcast so far along with Grammar Girls.

The question I had for you is you mentioned Ross 401k the other day and you mentioned a $15,000 limit.

What if you're at the current tax bracket at the current income level, where you could conceivably contribute

to both a Roth IRA and a Roth 401k, is the limit impacted because of the $4,000 limit that you can put into a Roth IRA.

In other words, what it dropped the amount that you could then put into the Roth 401k down to $11,000.

Hey Jonathan, thanks for the great question. If you're at an income level where you're eligible

to contribute to a Roth IRA and you can afford to max out both a Roth IRA and a Roth 401k, go for it. It's possible to contribute to and

max out both. The Roth 401k and Roth IRA contribution limits are independent of each other.

You simply need to be sure that you meet the income eligibility requirements for the Roth IRA.

If you're single and your adjusted gross income will be $99,000 or less in 2007,

you can contribute a full $4,000 to a Roth IRA.

If you're married and filed jointly,

and your adjusted gross income will be $156,000 or less in 2007,

you can each contribute $4,000.

So if you wanted to completely max out your 401k and Roth IRA contributions for 2007,

you could contribute $15,500 to a Roth 401k if your employer offers one or to a traditional 401k.

Plus you can also contribute $4,000 to a Roth IRA for a total contribution of $19,500.

Wow.

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