Is it possible for my wife and me to contribute to Roth IRAs even if we have separate 401(k) plans with our employers? By Kimberly Lankford, Contributing Editor August 14, 2006 Is it possible for my wife and me to contribute to Roth IRAs even if we have separate 401(k) plans with our employers? I contribute close to the maximum 401(k) limit while my wife does not. What are the limitations for contributing to an IRA or Roth IRA?You can contribute to both accounts. In fact, it's a good idea to max out both your 401(k) and Roth IRA if you can afford it. There are limits to the amount of money you can contribute to your 401(K) and Roth IRA every year, but the limits are separate from each other. In 2006, you can contribute up to $15,000 to your 401(k) -- or $20,000 if you are 50 or older. And if you're married filing jointly and earn less than $150,000 in 2006 ($95,000 if single), then you can each invest up to $4,000 in a Roth IRA for the year, or $5,000 if 50 or older. You can contribute part of the limit until your income reaches $160,000 (or $110,000 for singles). For more information, see our IRA Owner's Manual and Max Out Your 401(k). Advertisement When Your IRA Loses Money I invested $12,000 in the late 1990s in Roth IRAs for myself and my wife. The value today is about $10,000. Will there be any penalty if I withdraw the money? I'm only 57 years old. If you withdraw Roth IRA money before age 59 1/2, only the earnings are taxable -- not the contributions -- so you could withdraw the $10,000 without any penalty or tax bill even though you're only 57. And you may even be able to deduct your $2,000 loss. To do so, you'd need to close out all of your Roth IRA accounts and still have a loss. Unlike other investment losses, however, IRA losses are considered a miscellaneous itemized deduction, which you can write off only if you itemize and only to the extent that those deductions are greater than 2% of your adjusted gross income. For more information about the rules, see IRS Publication 590 Individual Retirement Arrangements. Got a question? Ask Kim at firstname.lastname@example.org.