As you've found, the IRS limits 401(k) contributions by high earners -- chiefly those who earned more than $115,000 in 2012 -- unless their company ensures that lower-paid workers are also saving for retirement.
Start by putting $5,500 ($6,500 if you're at least 50 by year-end) into a Roth IRA, which offers tax-free withdrawals in retirement, says Moline, III., financial planner Marty Kurtz.
In 2013 your allowed contribution falls to zero if your income tops $188,000 ($127,000 if you're single), but anyone under 70½ with earnings can fund a nondeductible IRA and then convert it to a Roth. But you may owe taxes on this back-door deposit if you have other traditional IRAs.
|Initial amount||Value, net of taxes, of contribution invested for 30 years|
|Roth IRA||$3,750 (after tax)||$28,500|
|Taxable account||$3,750 (after tax)||$22,400|
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|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.45%||4.52%|
|15 yr fixed||3.47%||3.55%|
|30 yr refi||4.44%||4.51%|
|15 yr refi||3.46%||3.54%|
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