Money Management Q&As

March 16, 2007

Roth 401(k) limits; online banking; tax-refund accounts

The contribution limit for a Roth 401(k)

The practice I work for plans to add a Roth IRA option to its 401(k) plan this year. I may not be able to contribute to the Roth since my wife and I will probably earn more than $166,000 in 2007, but how much could I put in if I'm eligible?

You'll be free to contribute if you choose to. The income limit that applies to stand-alone Roth IRAs doesn't count when you contribute to one within a 401(k). For 2007 the maximum contribution is $15,500, the same limit that applies to regular 401(k) accounts. But that's a combined total; you can't contribute $15,500 to your 401(k) account and the same amount to the Roth. If you're 50 or older, the combined limit rises by $5,000.

I'd like to find some traveler comments to help me decide which of two luxury hotels to stay at during my trip to Hawaii. Which websites do you recommend?

A good first stop is http://www.tripadvisor.com, which includes some 5 million consumer reviews of hotels and attractions. Other sites that post comments from travelers include http://www.complaints.com, http://www.consumeraffairs.com, http://www.my3cents.com, http://www.ripoffreport.com, and http://www.thesqueakywheel.com. You may also be able to turn up other useful information by entering the hotel names into a web search engine such as Google.

New safeguards for online banking

I'd like to try banking online but am nervous that hackers could get control of my accounts. I know banks use passwords to protect their customers, but what other safeguards can I count on?

Starting this year, the government will require banks to analyze their Internet security measures and institute other protections besides passwords if they haven't already done so. They'll have multiple options, including "scratch" cards containing special single-use passwords for online transactions; tokens that generate unique access numbers; ATM-type cards for Internet use; pictures that customers would preselect for display so they'd know they're at the bank's site rather than a phony one created by a would-be thief; and software that would recognize customers' fingerprints, voices, or typical keystroke patterns.

If you receive a phone call or e-mail message telling you to sign up for the new security measures, don't assume it's legitimate. That's a favorite scammer ploy, the FDIC warns. If you need additional information about security measures, call the bank or go to its website directly by typing the address into a web browser, rather than clicking on a link in an e-mail message.