The Money Mustache Community
General Discussion => Share Your Badassity => Topic started by: texxan1 on March 16, 2017, 03:41:30 PM
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So i wasnt paying attention to my paychecks from my employer because they go strait to a savings account and i live on cash from my side gig.... Its bonus time of year and i just looked at my paystub and it looked kinda funny... I was trying to decipher how they paid me, and i finally figured it out.... $7999 went strait to 401k pretax..... that made me hit the max pretax for the year... So stoked
Now the question is do i keep putting away the amount i do, which is 45% right now, or do i get the compay match only and invest outside of the traditional 401... :???? Thoughts guys.
seems to me since it will be after tax, it would be best to put in my new vanguard account....
Tex
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Yours must work a different way... I only get the company match for every paycheck I contribute to my pre-tax (or, if a Roth, then the match would go to the IRA). If I max out early, I lose the match (the 4% above the auto 1%) for the rest of the year, so I make sure to never max early. If it's maxed, and the auto 1% keeps getting put in, I'd be afraid I'd have to withdraw the extra and have to deal with issues from that.
But, if yours works otherwise, congratulations.
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I'm not sure what you are saying / asking. Did you hit the max to get the company match or the max of a 401k?
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Check if your company has a "mega" backdoor roth option. This allows you to contribute up to $54,000 to a 401(k) as an after-tax contribution. The limit is basically 54k - employer contribution - pre tax / roth 401(k) contributions. After you leave your company you can convert it to a Roth IRA and only pay taxes on the additional growth OR if your company allows it you can do an in-service withdrawal which allows you to convert to a Roth IRA immediately and let that money grow tax free.
See: http://www.madfientist.com/after-tax-contributions/ for more details
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Just finished my tax deferred accounts for 2017 too. Now the fat paychecks start rolling in and I have to figure out what to do with the dollars. Not really - already have a plan in place. Best wishes to all, Ap.