QUESTION:
Are the limitations between
contributing to an IRA or a 401k confined only to contributions or are you only
allowed to have one or the other. So, if we were to set up an IRA in the future
and roll the assets of the 401k into it - are we then bound to only contribute
to the IRA from that point forward or are we allowed to roll the assets into
the IRA and then continue contributing only to the 401k?
ANSWER: An individual is allowed to
participate in an IRA and a solo 401k at the same time; however, the tax
deductible contributions to an IRA are affected if you are also contributing to
a solo 401k plan. See following link for more on this.
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