Questions tagged [401k]

A 401(k) account is a tax-deferred retirement savings account setup by many employers for their employees in the United States. Employees can elect to contribute part of their earnings - either pre-tax or after-tax - to their 401k account and the employer will often make a matching contribution for a portion of it. The before-tax and/or after-tax contributions are subject to yearly limits set by the IRS. Related to the 403b and Thrift Savings Plan (TSP)

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30 views

Do employers receive any financial benefit from offering a RRSP/401K matching program? [duplicate]

I understand that companies that offer RRSP matching programs may be more attractive to work for/have better employee retention, and the employers may get warm fuzzies from offering it to their ...
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1answer
117 views

How should I distribute investment types between differently-taxed accounts?

Background: I'm 37 and work in the U.S. I have a gross income ~100k, a 401k funded to the legal limit, a Roth IRA funded to the legal limit, and a regular investment account. The 401k has most of the ...
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64 views

Return of excess employer contribution after transfer to IRA

A few years ago, I had an internship, and had to set up an account with the employer's retirement fund company. A couple of years after leaving the company, I was closing out old accounts, and ...
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3answers
233 views

Best Way to minimize taxes on 401K distribution?

I recently retired at 57 after 36 years with the same employer. I live pretty frugally and my pension is $90K covers all my normal living expenses. I have approximately $2M in retirement savings most ...
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0answers
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Stock Reclassification to ESOP in 401k

In my current 401k, there are periodic conversions (looks like the beginning of each year) of the classification of company stock to ESOP shares. There is no change in quantity of traded shares and ...
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2answers
2k views

100% employee contribution to 401K, how to handle employee paid social security and medicare?

An employee earns $12,000 a year and wants to defer $12,000 as an employee contribution to 401K: Does the employee need to pay employer the employee portion of social security and medicare? Can ...
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2answers
125 views

Salary deduction to contribute more to a 401K through the employer's match

If an employer is allowed to contribute up to 38K (57K-19K) to your 401K through a match, why don't we have an option to deduct the extra 38K from our salary and count it as the employer match in ...
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1answer
99 views

Year of 401k contribution for last paycheck?

I am getting my next paycheck on Jan 2nd, 2020. The paycheck covers work performed in 2019. Will the paycheck go towards my 2019 or 2020 401K contribution limit?
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1answer
60 views

What is the time window to deposit IRA account to handle this year tax benefit?

I don't have a 401K account, but am considering opening an IRA account to save some taxes. How long the time window is available for me to have the IRA account? Also in my understanding in the later ...
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1answer
109 views

My 401(K) plan and form 5500

I live in the United States and have a small unincorporated business. I have no employees and I am single. I have a 401(K) and a Roth 401(K) through E*Trade. Between the two accounts I have a little ...
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2answers
189 views

Conflicting advice about what to do with my 401k / Roth IRA

I left a company that I was at for over 18 years about a year ago. The company I was at was using Fidelity and I had then opened a Roth IRA under Fidelity as well. My Roth only has around 15k and my ...
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1answer
372 views

Buy Land Using Old 401K?

I have a 401K from a job I left ~7 months ago. I'm looking to buy some land and do construction on it. I need to put about $40K down on the land, but I only have ~$30K in savings. What's the best way ...
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1answer
50 views

Variable Annuity Vs Roth IRA Vs 401K. Pros & Cons of Investment Plans

I'm trying to understand the pros and cons of Variable Annuity products like Mass Mutual Transitions Select. I worked for a few employers for a short term like 1 to 2 years and had 401K with them. ...
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1answer
213 views

I plan to cash out my entire 401k within 2 years, should I maximize my contributions or should I minimize them and invest in money market/index funds?

I have a serious medical issue that makes collecting my 401k benefit a near impossibility. I have about 20k saved up in my 401k and we’ll call it $60k in the market mostly in index funds/ETFs. I ...
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Double entry process for 401k account exchange

I'm entering journal entries for hledger for a 401k account and have questions about how it should work when an account goes through an exchange (I'm not sure what it is exactly; I guess the finance ...
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2answers
100 views

Taxes on 401k withdrawal

I’m a bit confused why my dad had so much in fees withheld when he pulled some money out of his 401k. He is 67 and his 401k is through ADP. He wanted to withdraw 5k dollars. We did all the paper work ...
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1answer
66 views

401k rollovers - pros & cons question [duplicate]

I have some 401k money in a former employer plan. It is doing really well, I like their funds and their Financial Engines program. I hesitate to touch it. My new employer has a good plan. The way ...
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1answer
103 views

Can an employer change a 401k plan to make it worse without notice?

I have been at my current employer for three years as of March 2020. As per my 401k I am to be 100% vested at year three. Today, 11/24/19 I received notice that the vesting schedule has changed to ...
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2answers
185 views

Why 401K contribution as whole % rather than in quarter percent resolution [duplicate]

I asked another question, and there are reasons for employers to keep it in percentage of salary instead of fix dollar amount. But what is harm in making it a fraction of a percent, like permitting ...
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5answers
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Why 401k contribution as % of salary vs. fixed amount per pay check?

I am wondering why some companies do not let their employee choose a fix amount per pay check as a 401K contribution. In my all jobs it has been always a % of my salary, so I will chose a percentage ...
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2answers
165 views

Should I contribute more to my 401(k) or IRA?

I am trying to figure out a reasonable strategy for my situation. I make over the limit to write off traditional IRA contributions on my taxes starting in 2020. I currently contribute 8% to my 401k. ...
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3answers
123 views

will company match on 401K if employee exceed the limit [duplicate]

Suppose an employee has a yearly salary of $100K and his/her company matches "50 percent match up to the first 6 percent", and the employee is contributing at a rate of 40%. The employee will reach ...
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4answers
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Why should I invest so much in 401(k)?

I am 24 yrs old and am making $60,000/yr while saving ~41% of that. 28% of which is going to my Roth 401(k) and the rest is going into a TD Ameritrade and a small amount into a Robinhood account (both ...
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2answers
201 views

I left my job after a few months. I was not fully vested. Why is the non-vested amount still on my 401K plan?

I left my job after a few months. I was not fully vested. Why is the non-vested amount ($1000) still on my 401K plan? Why doesn't the employer just take the non-vested money away and put it in their ...
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1answer
164 views

Is $50k in business income enough to consider hiring a pension specialist?

I am currently a full time software developer, and have a side business done under my own LLC (S corp). For the sake of having concrete numbers, lets say I make $100,000 through my full time job, and ...
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Will an administrator exceed the 401K limit?

Suppose a person has a single job with $80K salary for the year and chooses 30% contribution to their 401K. The limit for 2020 contributions is 19.5K. Will the employer or the administrator stop ...
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1answer
104 views

Money type for dad's partial distribution from 401k?

My dad is 66, retired, and has around $75k in his 401k with ADP. He wants to pull $5k out of his account. ADP sent a form to fill out and I am helping him since he has some questions. On the form ...
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1answer
130 views

over contributed after-tax 401K

I have had two employers in 2019. Through both employers, I made around $18K pre-tax 401K contribution combined in 2019 (which is less than $19K limit). However, through employer match and after-tax ...
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2answers
81 views

401K loan repayment

401 K plan allows me to take a loan and repay it in monthly installments with 5% additional, which adjusts it for inflation, i.e., I do not have to pay any fees or interest rate for my loan. I know ...
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1answer
168 views

What is a Mega Backdoor Roth IRA?

The so-called "Mega Backdoor Roth IRA" was coined in the following article in 2014: I don’t hear about new ideas very often, but here is one that a few people might find very useful. I call it the “...
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6answers
13k views

Is putting money in a 401(k) plan risky?

I've been working for a company that offers me a MassMutual 401(k) plan as a benefit. The employer's match is 50% of my contribution. I've contributed 3% of my gross salary to the plan, and planning ...
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2answers
203 views

401k Taxes (USA) — Traditional vs Roth (not IRA)

Good afternoon, Looking for the 401k tax pros out there. I have four primary 401k tax related questions: 1) Income Tax Bracket at Retirement: When retiring and "cashing out" on a trad 401k: I ...
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1answer
59 views

Can I invest in both SEP IRA and IRA or solo 401(k) if i've worked in W2 for few months and as an independent contractor for the rest of the year?

I worked as a W-2 employee from Jan-Mar and became an independent contractor from Sep this year.My employer did not provide me 401(k) or any benefits. I received around 18K after tax from W2 and I'm ...
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1answer
218 views

Is the Thrift Savings Plan a 401k plan, a 403b plan, a 457 plan, or none of the above?

Is the Thrift Savings Plan a 401k plan, a 403b plan, a 457 plan, or none of the above? If it is none of the above, then where are the rules and regulations of the plan defined if not in the U.S. Code?
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216 views

When do we have to pay the tax for 401K withdrawals?

I am planning to withdraw money from my 401K to use it for down payment on a house. The question is, when do I have to pay the tax? If I withdraw it in 2020 after I file my tax return, would I pay the ...
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2answers
134 views

Am I eligible to be fully vested?

I have worked for a company in Illinois for a little more than 2 years and was layoff in 2016 in a "mass layoffs" of 37 employees. My 401K shows two balances: Vested balance: $25,651 and Current ...
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2answers
199 views

IRA limits with employer 401K

My wife and I both work and both our employers offer 401K plans. When I first started my job 4 years ago they had a policy that required you to work for 1 year before you could start making ...
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171 views

Am I on the right track? Feedback welcome!

Here's my situation: 43 y/o, married w/ two kids under 10. I'm in a defined benefit program and I have a formula where I can retire at 60 with 2% of my highest salary times the number of service ...
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3answers
231 views

Are the fees on this 401k plan too much?

My employer uses a relatively new company called "Human Interest" for our 401(k)s. I have 401(k) accounts with Fidelity and TransAmerica from former employers, and I'm trying to decide which is best. ...
2
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2answers
122 views

Does your 401k provider stop you when you hit your max?

In general, I was wondering who is responsible for keeping track of when a normal, employer-sponsored 401k account has hit its pre-tax contribution limits for a year. I assume that, in the end, the ...
2
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3answers
92 views

In-kind transfer for a traditional 401(k) to IRA rollover

I'm rolling over a 401(k) that is holding only VIVLX, a Vanguard target date fund, to a brokerage. It's not proprietary but it is the institutional class of the fund, so my brokerage minimum for ...
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0answers
57 views

What to do if company is not honoring vesting schedule in Pension Protection Act?

Let's say someone works for a company that lets employees contribute to a 401k, and the employer offers a match. Based on my read of the 2006 Pension Protection Act (beginning on p. 2 of the linked ...
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1answer
466 views

What will happen to my 401k money if I leave USA permanently?

I am 33 years old and currently employed in USA on a work visa. I am contributing to my employer provided 401k plan since 4 years. I might be moving back to my home country once I max out my current ...
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3answers
254 views

Reasons to invest in 401k vs pay off loan in 1 year?

I have ~$70k across 401k and Roth IRA. I have federal student loan at $17k with 3.8%. Thus, my NW is $53k. If I choose to invest $19k into my 401k and assume the average rate of return of 7%, my 401k ...
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1answer
95 views

What is “IRS compliance testing” for terminated 401k plans?

I have a 401k through a previous employer. That employer recently ceased operations, and as part of that, terminated their 401k plan. As such, the employer directed myself and other employees to fill ...
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5answers
314 views

Refinancing student loans in the context of an impending recession

I am a 23 year old, employed, Software Engineer working for a startup in an inexpensive city in the United States. I make $71k/year plus stock options that incrementally vest over 3 years. I have no ...
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2answers
132 views

basic retirement planning for someone middle-aged

I'm in my early 40s and haven't done anything for retirement yet. I do own some property which I plan to sell later this year, and I'm planning to use the proceeds to plan for retirement. The proceeds ...
3
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1answer
223 views

Is it typical to wait 19 months for first employer 401K contribution?

I want to understand if these policies would be considered typical, better than average, or below average. An employer offers a matching contribution to 401K, details are: 0% vested in employer ...
4
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1answer
196 views

Can my employer make me forfeit Safe Harbor match if I over contribute?

My employer 401k plan offers 'after tax non Roth' contributions, in addition to traditional pre-tax and Roth. I chose to max out my pre-tax contributions at $19,000 this year and then switch to '...
4
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2answers
421 views

Does a 401(k) loan count as debt when calculating Debt-to-Income Ratio?

Does a regular 401(k) loan count as debt when calculating one's Debt-to-income ratio when applying for a mortgage? The loan is within the organization that manages the 401(k), and it does not show in ...