I am currently employed to a private company and contribute to a 401k. Last year (2007) I maxed my contribution. I plan on maxing my contribution in 2008. I recently was hired part-time in a public institution and have the option of contributing to what is called "STRS" or, alternatively an "APPLE" plan. Are there any conflicts I need to be aware of? Can I contribute and max my 401k and yet contribute to either a STRS or APPLE without penalty? If I can contribute to both my public and private plans, is anyone aware of the STRS or APPLE plans? And, if you are, could you highlight the pros/cons of each?

BLC

BLC,

There is no such thing as a PUBLIC PENSION PLAN or PRIVATE PENSION PLAN based on whether or not your employer is the Gubment or a Private Company.

The pension plan is either a Qualified Plan or a NON-Qualified Plan.

Qualified Plan contributions (traditional IRA) are tax deductible within certain income ranges, have contribution limitations and have mandatory distribution rules, UNLESS it's a Roth IRA, then only the contribution is limited but there isn't any mandatory distribution at age 70 because Roth IRA contributions aren't tax deductible.

There are no restrictions on NON-Qualified Plan contributions regardless of income. Nor is there any mandatory distribution age and the cash in the plan grows tax deferred and is EXEMPT (in Florida) from legal process.

You can contribute to both plans limited only by the MAXIMUM contribution limits set by the IRS based on your income.

Click THIS LINK.

__________________
Gary Spicuzza, *SAFE
Copyright 1956
No Rights Reserved
*Self Appointed Financial Expert

I would never recommend that you max out your 401k plan because the choices given in 401k lpans are really poor. The only argument for any contribution to a 401k plan is the free money that you will get due to company the company. Find out how much you company will match and contribute only that amount to your 401k.

I hope that you don't plan to rely on your 401k plan for your retirement. Look at it as a bonus for retirement but look to invest for your retirement otherwise.

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It is not smart to play it safe but it is safe to play it smart.

Thanks Gary. That is a very good distinction.

BLC