If that 10% of your gross is higher than the allowable contribution for IRA’s, then you would go back to your 401 (K) and top it off to whatever 15% would be.
Example: Put in 5% to get the company match. Then fund the roth IRA upto the limit of $5500 for each spouse. That may not get you to 15%, but it does for most people. If you still haven’t made it to 15% of your income, then you go back and add to the 401(k)to reach 15%. Anything left over goes into a regular savings/investing account.
So if you made $200 K for “simple math”, you’d need to save $30,000. You’d have $10,000 into the 401K, then you’d still need to save $20,000. Filling both Roth IRA’s (one for you ($5500), one for the spouse ($5,500)) would get you another $11,000 saved for a grand total of $21,000. You would still need to save $9,000, to reach the goal of 15% ($30,000), so you would go back to the company 401(K) and put in up to the company limit, which could be $17,500 or whatever the goverment decided. If there is still money left over that needs to be saved, then you’d have to find some other account to put it in like regular invested funds for the 1,500 left needed to save to reach $30,000 since you could only put in $7,500 more with the first $10,000 at your company.
Personally I don’t know anyone who makes that much but I wouldn’t mind having that problem. 🙂 I also think that after your income is over 250 K you can’t contribute to a Roth IRA and it depends on if you’re married or not. Married people have a slightly higher limit. There is an income limit restriction somewhere in that ball park, I’m just not sure where the cut off is. I was just using large numbers for the example to work.
If I’m wrong, then that’s embarrassing. I think I did it right.