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Subject:Re: Retirement savings for W-2 contractors? From:RGOLDBER -at- mobius -dot- com To:"TECHWR-L" <techwr-l -at- lists -dot- techwr-l -dot- com> Date:Fri, 6 May 2005 13:26:59 -0600
Hi Guy-
My wife just left her staff job for a contract position, so I've beeen
doing some research.
Firstly, after leaving your previous job, you may have rolled over your
401(k) into a "rollover IRA". That way, if you join a 401(K) plan in the
future, you can add those funds to the new plan.
Second, even if you're a W2, if your agency doesn't have a 401(k) plan for
you, you can contribute pre-tax to a traditional IRA up to the maximum
allowed amount. (If you're married, and your spouse doesn't have a plan
either, the maximum allowed contribution is higher.)
You can also contribute to a Roth IRA, but the conreibutions aren't
deductible (though fund earnings are.)
The Vanguard website has some excellent info on these topics.
All the best
Richard Goldberger
>>Until this year, I've been a staff employee--first as programmer, then
as TW.
I've been putting pretax $$ into 401(k)s for years, with or without
employer
contributions.
Now, I find myself contracting through an agency and getting a W-2.
I understand that someone who DOES qualify for and use a retirement plan
in a
staff position can ALSO have an IRA for self-employment income, but I
suspect
that this W-2 modality does not count as self-employment.
What can the sages of Techwr-L advise me (us all) about the most effective
legal
way to squirrel money away for retirement in the case of W-2, particularly
if it
turns out that I go back to a staff position during the same calendar year
and
resume the use of the 401(k) mechanism?
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