Author Topic: EE Pre-Tax Contributions, EE After-Tax Contributions, or Roth Employee Basic  (Read 2345 times)

jmr5x

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I have 3 options for payroll deduction on my Vanguard account.  The first is the regular 401k and it will be maxed out around September if bonus funds stay the same. 

I have a Roth IRA Brokerage account through Vanguard but wondering if I should be utilizing the payroll deduction ROTH EMPLOYY BASIC option instead, or are they the same?

One last question, should the EE AFTER-TAX CONTRIBUTIONS only be utilized after the EE PRE-TAX CONTRIBUTIONS and a Roth are maxed out?
 

Proud Foot

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The Roth option is for a Roth 401k. The EE after tax contributions should be utilized after maxing out your pre tax/Roth contributions ($18k).  A big bonus would be if your employee allows in service distributions so you could do the mega-backdoor Roth.

boarder42

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what proud foot said.  find out about inservice withdrawals that may open up the mega backdoor roth.

Trudie

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To find out if your employer's plan allows in-service distributions for after-tax contributions you need to get your hands on the "Summary Plan Description."  It should be clearly laid out in there.  Then read other threads on this site about how to do the Megabackdoor Roth.

I do my contributions in this order:
Max out HSA ($6750)
Max out pre-tax 401K ($18,000)
Make Roth IRA contribution ($5500)
Make after-tax 401K contributions, then rollover to Megabackdoor Roth ($10,000)

jmr5x

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Thanks for the information everyone!  I am fixing to go and find this "Summary Plan Description."  Hopefully, I will have this option!


To find out if your employer's plan allows in-service distributions for after-tax contributions you need to get your hands on the "Summary Plan Description."  It should be clearly laid out in there.  Then read other threads on this site about how to do the Megabackdoor Roth.

I do my contributions in this order:
Max out HSA ($6750)
Max out pre-tax 401K ($18,000)
Make Roth IRA contribution ($5500)
Make after-tax 401K contributions, then rollover to Megabackdoor Roth ($10,000)