Author Topic: investing in 401k/traditional IRA after switching jobs beginning of the year?  (Read 1202 times)

starbuck19

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Hello fellow Mustachians,

I've recently switched jobs in Feb and my new employer does not provide a 401k plan. I thought I could open a traditional IRA and contribute up to $5500 tax free for 2017, but after doing some research I discovered that since I contributed in my previous employer's 401k plan (< $2000) for the first two months of 2017, I'll be considered as making contributions to the 401k for the entire year, even though I can't actually contribute anymore to my previous employer's 401k plan. What can I do to decrease my tax burden/taxable income for the year? Could I rollover my "old" 401k into a traditional IRA and be able to contribute up to the $5500 tax free?

Thanks in advance for your help!

dividendman

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You can open a traditional/roth IRA whether or not you have 401k contributions. The real question is your income and the limits on traditional IRA and roth IRA based on that. You can always do a backdoor roth IRA contribution.