Pirate 4x4 banner

41 - 60 of 76 Posts

·
Registered
Joined
·
6,246 Posts
Max you can contribute is $19k

Sent from my SM-G960U1 using Tapatalk
I used to think that was a rule across the board, but keep in mind that only applies to 401k's. If you work for a .gov or non-profit then you can contribute more if your employer offers it.

In my case my employer offers both 403b and 457b option and the 19k (19.5k) limit is NOT a combined limit. I'm able to contribute 38k (39k for 2020) into each. Also, the employer match amount DOES NOT count towards the limits. Keep in mind that i is also all individual so my wife can contribute 19k as well into her 401k. So in our case we can keep driving used vehicles and contribute $58,500+employer match % in 2020.
 

·
Registered
Joined
·
1,304 Posts
I used to think that was a rule across the board, but keep in mind that only applies to 401k's. If you work for a .gov or non-profit then you can contribute more if your employer offers it.

In my case my employer offers both 403b and 457b option and the 19k (19.5k) limit is NOT a combined limit. I'm able to contribute 38k (39k for 2020) into each. Also, the employer match amount DOES NOT count towards the limits. Keep in mind that i is also all individual so my wife can contribute 19k as well into her 401k. So in our case we can keep driving used vehicles and contribute $58,500+employer match % in 2020.
That's awesome! Are you govt or non-profit?

Private employees can contribute $19,500 this year to a 401k. Combined with an employer contribution, it maxes at $57k, but that would require a pretty healthy employer match.

Congrats on your big savings, it's the smart way to go. I hope you're thinking through what you're saving in your outside taxable accounts, too. Living cheaply and saving big mean you're primed for early retirement, but you have to figure out what to do until you're old enough to start withdrawing that stuff. We're having to save at a big rate in outside accounts so we'll actually be able to retire early.

Also, people--if you're in a high-deductible insurance plan, max out your HSA. Then don't pull anything from it. It's even better benefits than a 401k, and there is about a 99% chance that you'll have a bunch of medical expenses later in life.
 

·
Change is good.
Joined
·
35,188 Posts
I'm guessing some of you klowns are still contributing and counting that as "growth". Wake up. It was a great year, but I have one I'm contributing to, and two other accounts that I'm not, so that's a more accurate picture, unless you monitor all your funds, their respective percentage of your portfolio, and then figure out your portfolio gains.
 

·
Registered
Joined
·
5,954 Posts
Anyone else using a Roth 401k? My employer started offering it last year. Ive been using it since. Im 31 now, I am a little undecided on if its the better path or not.
 

·
Registered
Joined
·
6,903 Posts
401k's can have other "features" that let you contribute more money, namely profit sharing, new comparability and cash balance plans. I have some clients putting $50K annually into their plans.
yeah but anything over 19000 last year was after tax $. It's a questionable route to take. Brokerage could be smarter unless they are trying to protect their shillings from a bankruptcy or getting sued into oblivion.
 

·
Registered
Joined
·
834 Posts
People must be making pretty good money to be able to afford 19,500 to go into a 401K every year. Thats over 1/3 of my salary. Or im just poor. I feel im living cheap, my newest vehicle is 2008. everything but the house is payed for.
 

·
Registered
Joined
·
460 Posts
Anyone else using a Roth 401k? My employer started offering it last year. Ive been using it since. Im 31 now, I am a little undecided on if its the better path or not.
I am around the same age as you, I currently contribute 10% to a Roth 401k. Company matches 6% which goes into a non Roth account. I also max out my Roth IRA every year, and contribute to an HSA. I have thought about switching to a traditional 401k for tax benefits and to have a little more money in each paycheck, but I am undecided. I guess I question if it is the best decision at my current income level to have two different Roth retirement accounts.

If I was sitting slightly above the next tax bracket I would switch to traditional 401k to lower my taxable income into to the lower bracket.

I really should go sit down with a financial advisor. :laughing:
 

·
Registered
Joined
·
6,246 Posts
I am around the same age as you, I currently contribute 10% to a Roth 401k. Company matches 6% which goes into a non Roth account. I also max out my Roth IRA every year, and contribute to an HSA. I have thought about switching to a traditional 401k for tax benefits and to have a little more money in each paycheck, but I am undecided. I guess I question if it is the best decision at my current income level to have two different Roth retirement accounts.

If I was sitting slightly above the next tax bracket I would switch to traditional 401k to lower my taxable income into to the lower bracket.

I really should go sit down with a financial advisor. :laughing:
I'm a little on the fence on that. My experience has been that advisers ask me "what my goals are" and "what I would like to do".
"Deliver pizza's, retire at 21 and get 1,000,000 a year till I'm 120 years old with no risk" isn't a good answer for them so I decided just to read and educate myself as much as possible for my situation. The one I talked to didn't even know that I could contribute twice the 401k limit, was the first he'd heard about it. That was enough for me.

Just about everything you read initially says Roth is the way to go because income tax is forecast to go up and they expect you to want to withdraw 80% as much in retirement as you do now, but it depends on how you plan on living in retirement, and what state.
I gave up trying to understand it and split it.
 

·
Registered
Joined
·
6,246 Posts
People must be making pretty good money to be able to afford 19,500 to go into a 401K every year. Thats over 1/3 of my salary. Or im just poor. I feel im living cheap, my newest vehicle is 2008. everything but the house is payed for.
Marry a suga-momma! Kidding, but having two incomes in a single house, MFJ, does help with saving. We definitely keep the frivolous purchase down as much as possible in order get money into retirement and savings as early as possible in our careers. No payments (except house which is almost 50% paid off on a 3.3% loan). We still have toys, they are just from the 70's and were either free or very cheap.
While I was in grad school and she was in pharmacist school we lived on my grad school stipend, did odd jobs for hustle money, and her scholarships. Our goal has been to live similarly to that since we got big kid jobs and save the rest. If it weren't for the kids, house, and some fun projects and trips now and then we'd still be on track to retire by 45 (457b allows for penalty free early withdrawl, plus other investments). That idea has vanished.
With my luck I'll keel over at 58 and never get to enjoy a dime of it.
 

·
Registered
Joined
·
148 Posts
Not necessarily. Income level needs to pretty high 200+ and need to have control of the 401k, but much higher tax deductible amounts are available. As mentioned, not for everyone

Sent from my SM-G975U using Tapatalk
 

·
Registered
Joined
·
5,507 Posts
I rely more on cash stuffed in buried coffee cans than the "imaginary" stock market $$.

I have an IRA, but its money I don't expect to ever see again.

I'm not scraping every cent to horde for "when I retire". I'll enjoy life now. Who knows, I may get run over by a busload of nuns next week.
 

·
Premium Member
Joined
·
2,280 Posts
I am retired and needed to roll over my 401K into an IRA. I was able to keep all my companies stock in this transaction. The Target Date junk was used to buy into some good looking dividend paying ETFs.

I loved the security of the 401K, but this new IRA has a nice set of investment titties to play with. :smokin:
 

·
Registered
Joined
·
5,954 Posts
I am around the same age as you, I currently contribute 10% to a Roth 401k. Company matches 6% which goes into a non Roth account. I also max out my Roth IRA every year, and contribute to an HSA. I have thought about switching to a traditional 401k for tax benefits and to have a little more money in each paycheck, but I am undecided. I guess I question if it is the best decision at my current income level to have two different Roth retirement accounts.

If I was sitting slightly above the next tax bracket I would switch to traditional 401k to lower my taxable income into to the lower bracket.

I really should go sit down with a financial advisor. :laughing:
Ive been doing more research on the matter and decided that the Roth was the right path. Then I have been noticing that the company match wasn't quite what I thought it should be. In carefully reading our contract, the company contributes 2% no matter what. However they do not contribute the 50% match up to 4% with the Roth option. So in my case I am missing out on 2% matching right now.

I don't really know what the best option is, its hard to know the future. I am thinking about switching to 8% traditional and keeping the balance of my contribution in the Roth. It seems I need to take full advantage of the match, even as little as it is. In my case that's about $1,200 a year I am currently leaving on the table.
 

·
Registered
Joined
·
460 Posts
Ive been doing more research on the matter and decided that the Roth was the right path. Then I have been noticing that the company match wasn't quite what I thought it should be. In carefully reading our contract, the company contributes 2% no matter what. However they do not contribute the 50% match up to 4% with the Roth option. So in my case I am missing out on 2% matching right now.

I don't really know what the best option is, its hard to know the future. I am thinking about switching to 8% traditional and keeping the balance of my contribution in the Roth. It seems I need to take full advantage of the match, even as little as it is. In my case that's about $1,200 a year I am currently leaving on the table.
Can you contribute to both a Roth 401k and traditional and still get the full match?
 
41 - 60 of 76 Posts
Top