Can I have an easy IRA and a 401K-(provided by employer) at the same time?

Question

When I did my taxes this year they lady suggested that I put some money into an retirment plan. So I put $300.00 into a easy IRA through H&R Block. I now have been at my employer long enough to open up a 401K with a 60% match a year. My question is, can I start putting money into a 401K at work, and continue to contribute to this easy IRA over my lifetime; or do I have to choose just one of these plans? I am only 23 yrs. old so I do not know what my best overall option would be. Please explain why if I can only have one. I would like to understand why, and then choose the best option for me.

Answer 1

Call H&R block to check. The only issue might be there may be a total contribution limit per year. But you would have to have  a very high income to most likely hit that.

As a side note, since you have a match, it might be better to just put all the money in the 401k.   If not a small Roth IRA would be a good idea.

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Answer 2

You can contribute to both accounts.

The 2008 IRA contribution limit is $5,000 and the 2008 401k limit is $15,500.

You definately want to start the 401k. If at some point you can't afford to contribute as much, just decrease the IRA contribution and keep the 401k going.

Answer 3

Yes, you can as long as your total income does not exceed the IRA contribution limit.  Don't know what you mean by an "easy" IRA but you should go with a Roth IRA.