Announcement

Collapse
No announcement yet.

401k questions

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • 401k questions

    I bet these have very straight forward answers and I appreciate your help.

    I'll be hospital employed, high salary, with a 1:1 401k match.

    Combined contribution maximum limit is 58k. I'll put in the maximum 19500 and they'll do the same. Is there any way to get up to the 58k max?

    They offer traditional and post tax/roth accounts. So does the first 6k (or 3k each) just go to the Roth and then the rest goes to the traditional or is the Roth maximum completely separate from a tIRA?

  • #2
    If the offer post-tax accounts, you will be able to contribute the $19k balance after-tax, but I personally w/n recommend doing so unless the plan also offers the ability to make an in-service distribution (that you can immTediately r/o to Roth) or you plan to leave your employer in no more than 5 yrs (preferably fewer) so you’ll have the opportunity for the withdrawal in the short term. his is only a general recommendation and, as always, I’m not your financial advisor.

    The Roth maximum within an employer plan is the lower of earned income or $19,500 and is completely separate from the Individual Roth IRA, to which you can contribute another $6k (under age 50) or $7k (age 50+.

    Welcome to the forum!
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

    Comment


    • #3
      Too much to type, you will have to do some research.
      Look up
      ”Mega backdoor Roth”
      ”Backdoor Roth”

      if your plan allows the first, you can shovel lots of money into Roth accounts
      you should be able to do backdoor Roth. Only kicker is if you have an IRA already. There are separate/extra rules if that is the case

      if your plan allows it, you will be able to put 19,000+6000+6000=31000 into Roth each year (if ur married, subtract 6k if you aren’t)

      Comment


      • #4
        Originally posted by Peter1
        Is it better to contribute to your 401k max upfront or little by little each paycheck?
        yes

        Comment


        • #5
          Originally posted by Peter1
          Is it better to contribute to your 401k max upfront or little by little each paycheck?
          Depends on the plan.
          - some limit match to a % per paycheck . Once you stop, the don’t match.
          - some have a “true up”. Adjust employer contribution to the total employee contribution.

          Don’t lose the match, but sooner is better.

          Comment


          • #6
            In general, a lump sum investment is better than splitting up over time for a short term (such as a year). For employees, DCA (Dollar Cost Averaging) translates into buying a chunk of the market annually over a period of years.

            However, considerTim’s advice before deciding how to handle this. Review your SPD (Summary Plan Description) to make sure you are not missing out on any employer matches and will receive an annual true-up.
            Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

            Comment


            • #7
              No

              Comment


              • #8
                Originally posted by Bellescamp View Post
                Too much to type, you will have to do some research.
                Look up
                ”Mega backdoor Roth”
                ”Backdoor Roth”

                if your plan allows the first, you can shovel lots of money into Roth accounts
                you should be able to do backdoor Roth. Only kicker is if you have an IRA already. There are separate/extra rules if that is the case

                if your plan allows it, you will be able to put 19,000+6000+6000=31000 into Roth each year (if ur married, subtract 6k if you aren’t)
                How are you guys able to contribute to a Roth as well when you make over the MAGI maximum?

                Comment


                • #9
                  Originally posted by Orifdoc View Post

                  How are you guys able to contribute to a Roth as well when you make over the MAGI maximum?

                  Relative to your question, the income limitations that are applied to individual Roth’s (Roth IRAs) are irrelevant to employer plans, That said, your plan contribution allowances are subject to ADP and ACP testing when determining the amount you can contribute as a HCE (Highy Compensated Employee). That discussion is beyond the scope of this thread but you can easily Google and then ask specific questions.

                  Welcome to the forum!
                  Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

                  Comment


                  • #10
                    Originally posted by Orifdoc View Post
                    How are you guys able to contribute to a Roth as well when you make over the MAGI maximum?
                    The post you responded to was not very clear if you are not "inside the game"

                    As pointed out by jfoxcpacfp, employee deferrals to an employer retirement plan are only limited by net W-2 compensation. There is no MAGI limit. Only traditional IRA deductions and direct Roth IRA contributions have MAGI limits.

                    There is no MAGI limit for making a traditional IRA contribution and not taking the deduction. The so-called Backdoor Roth is a non-deductible traditional IRA contribution followed by a Roth conversion.

                    If this is done with little to no pre-tax balances in all traditional, SEP and SIMPLE IRA accounts on 12/31 of the Roth conversion year. There is little to no tax liability. This is effectively an indirect Roth contribution.

                    Comment

                    Working...
                    X