Author Topic: How to quickly get money into 401k  (Read 3267 times)

bryanth

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How to quickly get money into 401k
« on: July 12, 2014, 06:04:25 AM »
Hey,

So I've sold a few personal items and have made about 12k, which I've put into a high-yield savings account (.80%) for the time being as I do my 75% payroll 401k deduction. Currently I have maxed out my Roth and this will have me max my 401k this year.

Is there any way to get this in faster so that I can start compounding sooner? It will still take me about 3-4 months to get this into it.

Thanks!

pksr

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Re: How to quickly get money into 401k
« Reply #1 on: July 30, 2014, 02:11:27 PM »
You're talking about money with a very long investment timeline - impatience at a 3-4 month delay is misplaced. As long as you max out your 401K by the end of the year, you're fine, and dollar cost averaging during the course of the entire year (rather than putting it all to work immediately, which sounds like your desire) is advised. It's a marathon, not a sprint.

brooklynguy

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Re: How to quickly get money into 401k
« Reply #2 on: July 30, 2014, 02:18:50 PM »
Agree that front loading won't have a big effect in the scheme of things, disagree that it's better not to do it and dollar cost average instead.  Just make sure you don't miss out on any company match by front loading.

See this excellent article by the Mad Fientist:

http://www.madfientist.com/front-loading/

Beric01

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Re: How to quickly get money into 401k
« Reply #3 on: July 30, 2014, 04:59:53 PM »
Agree that front loading won't have a big effect in the scheme of things, disagree that it's better not to do it and dollar cost average instead.  Just make sure you don't miss out on any company match by front loading.

See this excellent article by the Mad Fientist:

http://www.madfientist.com/front-loading/

Yeah, I'm at a 75% contribution rate - the max. I max out my 401K quickly, and my company has "true-match" where they give me the balance of my 401(k) match I might have missed at the end of the year.

okashira

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Re: How to quickly get money into 401k
« Reply #4 on: July 30, 2014, 05:12:34 PM »
Re-characterize your ROTH IRA as an IRA, then roll it over to the 401k?

I did this with an IRA I had to consolidate (and the funds in my 401k are good)

bryanth

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Re: How to quickly get money into 401k
« Reply #5 on: July 30, 2014, 07:57:56 PM »
I contacted HR and they offer this as well. I'm currently doing the max 75% and when I reach the limit, my company will refund me the remaining amount beyond true match.

Agree that front loading won't have a big effect in the scheme of things, disagree that it's better not to do it and dollar cost average instead.  Just make sure you don't miss out on any company match by front loading.

See this excellent article by the Mad Fientist:

http://www.madfientist.com/front-loading/

Yeah, I'm at a 75% contribution rate - the max. I max out my 401K quickly, and my company has "true-match" where they give me the balance of my 401(k) match I might have missed at the end of the year.

Scandium

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Re: How to quickly get money into 401k
« Reply #6 on: July 31, 2014, 08:18:09 AM »
I got a windfall of ~$30K, and put it into my taxable investments. But since I'm not maxing my 401k (only 2/3 or so) as I don't think I could pay the bills if I did, I'm now wondering if I should have maxed the 401k and used the cash to pay the bills for a while instead? On the other hand I like the security/diversification of having a sizable taxable portfolio in addition.

I'm early 30s so do have some time, and my company give a straight up 10% contribution as well.

Beric01

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Re: How to quickly get money into 401k
« Reply #7 on: July 31, 2014, 11:27:57 AM »
I got a windfall of ~$30K, and put it into my taxable investments. But since I'm not maxing my 401k (only 2/3 or so) as I don't think I could pay the bills if I did, I'm now wondering if I should have maxed the 401k and used the cash to pay the bills for a while instead? On the other hand I like the security/diversification of having a sizable taxable portfolio in addition.

I'm early 30s so do have some time, and my company give a straight up 10% contribution as well.

I would definitely use the windfall to pay your bills and max your 401K. Reducing your taxes from your highest tax bracket is pretty powerful.

You also can use the "Roth IRA Conversion Ladder" to convert money from your 401(k) almost tax-free in ER. The 401(k) is awesome.