Limits for 2007 are $15,500 each for those under 50, or $20,500 if you’re over 50;
for 2008 $16,000 for under 50, $21,000 if you’re 50 or older

http://www.irs.gov/app/scripts/retriever.jsp

and select publication 571.

If you’re not sure what type of IRA you have (traditional or Roth), contact the fund company (or bank) that holds your IRA and ask them.

I hope that helps.

This book is very thorough and it will definitely take a while to read through even if you have quick questions. Most of the book concerns how to plan which IRA is the best for you and the benefits or lack of with each. There are a lot of tricky rules, about withdrawals, early withdrawals, taxes and/or penalties on different IRAs that are worth considering and understanding before investing.

This was very sobering look into the future and well worth the time and effort to plod through. There is a fair amount of math involved as it helps you calculate how much you will need to invest to live the style you would like. (The appendix at the end is filled with tax forms- yuck!) And frankly if you are not mathematically minded you may just want to give up even though they do give several examples.

In summary, I think this book does give you everything you need to know. For myself it helped me get an idea of what I wanted to do without feeling like a complete dummy. But a lot of the book involves more complicated stuff (taxes etc.) which are not so straightforward although the book tries to make it easier. If you are analytical or good mathematically I believe this will be great, probably a breeze but if you are challenged (like me) you might want to read it for the general info and then see a specialist to help you plan further.

Score: 4 / 5

“An Overview of Tax Rules” addresses normal withdrawal of your money for ages 59 1/2-70 1/2. It tells you what is taxed, when, what your options are for distributions and which are more advantageous, options if you receive the plan as part of a divorce settlement, mandatory withholding, and options for inherited plans, which are also discussed in more detail later. Subsequent chapters discuss early distributions (taxes, how to calculate, exceptions), with a chapter dedicated solely to calculating substantially equal periodic payments; required distributions (rules, penalties, calculating how much you need to withdraw, setting up beneficiaries); distributions to inheritors; and chapters dedicated to Roth IRAs (rollovers, conversions, taxes) and Roth 401(k)s.

Each chapter begins with a note about who needs to read the chapter, so you don’t have to read the whole book to find the information you want, and ends with a list of the tax code sections for the topic under discussion. For each withdrawal scenario, the authors explain the complex set of rules and how to minimize your taxes and penalties in as plain English as possible. Truthfully, the tax code is so arcane and the options so numerous that I don’t know how most retirees manage. For each distribution option or scenario, at least one example is given, so you can see how it works. The appendices contain examples of IRS forms, notices, and schedules, Life Expectancy Tables, and Uniform Lifetime Table, which you may need to make some calculations.

With a family member retiring soon on whose plans I am the beneficiary, I was interested in understanding the rules for normal, mandatory, and inherited distribution of every kind of plan except Roths. There are enough options and pitfalls to make my head spin, but generally you will want to make a beeline for the ones that apply to you. Sections within the chapters are clearly titled to help you do that. I am still fuzzy on a couple of points that probably don’t apply to me anyway, but “Taking Your Money Out” is very informative. I discovered options for early distribution that I wish my relative had known about sooner, so you may not want to wait until you retire to pick up this book. It’s essential to know what kind of plan you have, so be sure to confirm that if it’s not obvious.
Score: 5 / 5

I wish that I had done more in the past. My company matches exactly the same as yours and I am doing 12%.

Contribute at least 5% or you’re giving up the biggest return on your investment.

You can put money into an IRA, or other retirement plan, but not into your employer’s 401(k) plan. You will not be able to max the 401(k) tax deferral limit, however, you can open other tax exempt retirement accounts.

Invest in your 401(k) up to the match then…

Invest in your IRA until the max then…

Invest in your 401(k) until the max then….

Invest in your taxable account.

As another poster stated…invest early and often and you will be fine.

Bear in mind, you can also contribute to an IRA. You would have to check to see if you can make a deductable contribution or a Roth contribution based on your own personal situation.

If you’re that overpaid, maybe you’d like to open a Roth? That’s another $5k a year.