The Money Mustache Community
Learning, Sharing, and Teaching => Taxes => Topic started by: zero_house on August 13, 2017, 10:35:28 PM
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Dumb question. My new employer doesn't offer a 401k plan for the first year of employment. Are my wife and I limited to the $5,500 per person IRA contribution limit, or is there some other tax-advantaged way to save more money this year? Thanks!
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You may shield just shy of $7k if you use an HSA for family coverage, if one of your employers offers one.
Alternatively, if your wife's employer doesn't provide a 401(k) at all, consider doing some lobbying for them to open one, or a SIMPLE IRA.
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We are in the same boat. It sucks.
I have written to my senators about this, basically asking that they allow people who do not have a 401k through work to be able to contribute at least another 18k to their IRAs.
Basically I just have a taxable brokerage account that is 6 times the value of my IRA.
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Frustrating for me, too. My company offers a 401(k), but no match. To make it much worse, I'm a HCE, and so am limited to contributing $4k/year. My IRA contribution is not tax deductible, either. (I do a backdoor Roth.)
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This isn't really a solution... but consider the option of playing catchup in coming years.
E.g., if you want to save $12K a year into the 401(k)--say that's your plan--you can in years 2 and 3 bump your contribution from $12K to $18K and sort of, by year 3, have caught up.
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Are you in the 25% or over tax bracket? If not then just saving in a taxable account is just as good IMO.
"consider the option of playing catchup in coming years." So I had no 401k available for over a decade, until I finally became self-employed and started a solo 401k. Now I can put away $53k/year, so my retirement accounts are quickly rising toward my taxable now to create a good tax diversity for retirement.
The key is to not spend money & inflate lifestyle. Whether you pay off your mortgage, save in retirement accounts, save in taxable accounts, etc, I've found that to make little difference over the short term.