The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: blackjack on March 15, 2014, 09:42:51 AM
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I noticed that the percent of my pay that goes into my roth comes from my gross pay...
I usually gross around 1500 and take home around 1000 after taxes.. so 15% comes from the 1500 and not the 1000.
I thought roth was after taxes.... When is the money in my roth taxed?
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Depends on the type of roth, you dont give any details so I would suggest reading up at
http://en.wikipedia.org/wiki/Roth_IRA (http://en.wikipedia.org/wiki/Roth_IRA)
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I'm not sure what exactly you are trying to ask. The Roth contributions reduce what you take home, without reducing your taxable income since it is taxed now.
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If it's happening as you're describing, it sounds you have a regular 401k not a Roth 401k. Talk to your plan administrator and figure out the details.
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Yeah thats what im thinking.... BUt on my paycheck and under my account it is stated at ROTH CONTRIBUTIONS, but i'lll find out for sure
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Traditional or Roth your contribution amount will be contribution percentage x gross pay. If you are contributing to a traditional 401K then your taxable income is gross pay less your 401K contribution where as if you are contributing to a ROTH 401K then your taxable income is equal to your gross pay (I am ignoring other pre-tax deductions such as healthcare, HSA, etc).
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I think this was around 8% or something going into my 401k
gross 1,405.78
taxed 427.69
UNIONDUE 38.00
TEAMSTER ROTH 98.40
NET: 840.69
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Some companies calculate it as a percentage of your base pay and do not include overtime or anything else. So it's not always gross pay.