DEAR LINDA: If possible, I would put 100 percent of my retirement savings into a Roth IRA with good, growth stock mutual funds before messing with a non-matching 401(k). But remember, my goal if you follow the Baby Steps is to be debt-free except for your home, and have an emergency fund of three to six months of expenses, before you begin setting aside for retirement. These are the steps that allow you to be prepared for emergencies and free up your largest wealth-building tool, which is your income.
With your income, both you and your husband could open Roth IRAs and contribute $5,500 each in 2013. That's a total of $11,000 toward retirement next year, and it's only 11 percent of your income. With this in mind, I'd advise going ahead with your 401(k)s after your Roth IRAs are in place. That would flesh out the remaining 4 percent and give you guys 15 percent of your income going toward retirement.
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