Pretend you switched jobs this year, and because you had to be at your new job for six months before participating in the company-sponsored 401(k), your retirement contributions for the year are much lower than you'd like.
What's your move?
ETA: Sorry - should have been more specific. Where would you open your IRA? Thanks!
Meaning for 2013? Also, are you eligible for a Roth IRA? How much do you plan on contributing to retirement this year?
We're actually in a similar position... Either way, my husband would contribute $17,500 to his 401(k) and $5500 to a traditional, non-deductible IRA. But he started a new job last May, and isn't eligible for matching until May. So he'll put $5500 in an IRA between now and May, and is not contributing to his 401(k) until May. In May, he'll start contributing to a 401(k), with his contributions set to get to $17,500 by December 31.
Not ideal, but for us that maxes out what we can contribute and the match. But if you aren't planning on maxing out and/or you have Roth IRAs in the equation, you may want to do something different.
You could also put aside the amount you *would* have put in your 401(k) from January - June, double what you would contribute normally for July - December, and use the cash you saved from January - June to supplement your smaller paychecks in the latter half of the year.
You could also put aside the amount you *would* have put in your 401(k) from January - June, double what you would contribute normally for July - December, and use the cash you saved from January - June to supplement your smaller paychecks in the latter half of the year.
This would be my plan if you are indeed referring to 2013.
More info: I actually have issues for both 2012 and 2013. So, for 2013, I can do what you're suggesting, V. But for 2012, my only option is an IRA, right? Which institution do people recommend? Is ING Direct bad? They're offering me $50…
More info: I actually have issues for both 2012 and 2013. So, for 2013, I can do what you're suggesting, V. But for 2012, my only option is an IRA, right? Which institution do people recommend? Is ING Direct bad? They're offering me $50…
You're right -- for 2012 you only have an IRA as an option. But you can put up to $5000 in it, which isn't shabby!
I like Vanguard and Fidelity (have used both). My 401(k) is with ING and I haven't had any problems, but 401(k) management is a bit different from IRA management maybe?
More info: I actually have issues for both 2012 and 2013. So, for 2013, I can do what you're suggesting, V. But for 2012, my only option is an IRA, right? Which institution do people recommend? Is ING Direct bad? They're offering me $50…
You're right -- for 2012 you only have an IRA as an option. But you can put up to $5000 in it, which isn't shabby!
I like Vanguard and Fidelity (have used both). My 401(k) is with ING and I haven't had any problems, but 401(k) management is a bit different from IRA management maybe?