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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Is this a viable strategy for avoiding the pro-rata rule for backdoor Roth while maintaining the superior investment options in my non-Roth IRA?

Assume that my 401(k) supports both reverse rollover from IRA and in-service rollover to an IRA. I am doing a backdoor Roth, and want to avoid the pro-rata rule. The general way to do this is to ...
asgallant's user avatar
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Contribution from personal checking account to Solo 401k as Single-Member LLC

I have Single-Member LLC (file as a sole proprietor). Should I make contributions (Employee deferrals, Employee after-tax contributions, Employer contributions) to a solo 401k from my business ...
illuminato's user avatar
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Consolidating Multiple Solo 401k Plans into One

My spouse and I have separate solo 401k plans (let’s call them Plan A and Plan B), which we opened a few years ago when we undertook self-employed activities. This year, we opened an LLC as QJV and ...
illuminato's user avatar
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1 answer
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Converting some Pre-Tax 401k Contributions to Roth Contributions

Is it possible to convert some Pre-Tax 401k contributions to Roth contributions each year? Since I would have to pay taxes on the amount converted I wouldn't be able to do it all at one time.
Rich's user avatar
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401k Contributions Guidance for Two-Member LLC in a Community Property State

We established an LLC at the beginning of this year, with just two members – my spouse and myself. We reside in a community property state and file our taxes jointly as a married couple. Throughout ...
illuminato's user avatar
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3 answers
195 views

Does taking a 401k loan have the same effect as a hedge against a down market?

I have a 401k balance in the low six figures. I maximize my contributions every year to the IRS max and my employer has a 6% match. This results in about ~$35k of new money going into my account every ...
PropositionJoe's user avatar
2 votes
2 answers
73 views

Advice on 401k rollover to IRA

Basic question probably. I m looking for advice on rolling over a portion of amount in my 401k to an IRA. My needs are: a) to eliminate tax on withdrawal from IRA b) Have flexibility of withdrawal ...
SomeDude's user avatar
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3 votes
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Roth vs Traditional 401K when paying income tax in two states

I graduated in May and got my first full-time job and would like to being contributing more to retirement. I live in New York State (not NYC) and work in Connecticut so I pay state income tax in both ...
E400Jack's user avatar
4 votes
2 answers
533 views

Tracking down old IRAs / 401(k)s

How does one go about tracking down 401(k)s from previous companies? Is there a more convenient method than trying to get in contact with HR from these past companies? I wouldn't mind paying for a ...
skepticalforever's user avatar
1 vote
1 answer
137 views

After 4 yrs, new money shows up in closed 401K account

I separated from a company on 12/30/2015. Feb 2016 I paid $60 distribution fee to rollover the entire 401K balance to an IRA. Fast forward 4 yrs, in March of 2020 I get an email "your statement ...
Bob Duncanson's user avatar
15 votes
4 answers
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How to vet a potential financial advisor to avoid being scammed?

Most of my retirement funds are currently in an account at Fidelity. I was contacted about a year ago by one of the many wealth management services out there, and through a number of telecons and ...
rothloup's user avatar
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Considering current market situation is it wise to convert 401K account into IRA

This is what I know about 401k and IRA accounts: 401k accounts are employer-sponsored plans, which means that you can only participate in a 401k plan if your employer offers one. IRAs, on the other ...
OpenStack's user avatar
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4 votes
1 answer
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In the US, is post tax 401k different from Roth 401k?

I had a talk with the brokerage firm retirement planning team, and they told me that if I have money in 401k, it can be pre tax, post tax, or Roth 401k, and even post tax and Roth 401k are different. ...
Stefanie Gauss's user avatar
12 votes
5 answers
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My employers "401(k) contribution" is cash, not an actual retirement account. What are my options?

I just took a job that I like, and the line in the offer letter turns out to be misleading (I think through inexperience, not manipulation). This is it: You will eligible to receive a 401(k) match of ...
pixelearth's user avatar
0 votes
1 answer
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US rollover IRA for non-resident alien

I am not a US citizen, and I am currently not resident in the US. I lived and worked in the US between 2014 and 2016 and I have a 401(k) from that time. The 401(k) plan is being terminated and I am ...
Tom's user avatar
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Do I need to keep/file "Distribution Statement" for Mega Backdoor Roth IRA?

My new employer offers the Mega Backdoor Roth option. After-tax contributions can be automatically & immediately converted to Roth within the 401(k), and can be rolled over to a Roth IRA at any ...
yoozer8's user avatar
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4 votes
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Quotes for funds in my Fidelity-managed 401(k)?

I've had several employer-provided plans through Fidelity over the years. Fortunately, they offered extremely low-cost passive investment options, like Vanguard Institutional Index Trust, which tracks ...
Dan Lenski's user avatar
15 votes
4 answers
5k views

Did I give the right advice to my father about his 401k being down?

My dad has seen recently that I have taken an interest in finance and he asked me what he could do about his 401k being down. So I said the US is currently in a recession and now you should put in ...
Linkin's user avatar
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How to 'recession-proof' a 401k (least risky investments)?

A 401k can have risky and less risky investments. What are recommended as the least risky investments within a 401k within the USA?? Presently most of the 401k is in conservative funds (PHYZX, MWTIX). ...
Parkaboy's user avatar
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pending recession: keep money in 401k or savings account?

Husband and I are on Social Security. I have a 401k of about $225K, not a lot. With the impending recession, probably during Q2 2023, husband wants me to withdraw $$$ (e.g. $8K) from 401k and put it ...
Parkaboy's user avatar
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1 answer
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Does the pro rate rule on taxes for backdoor Roth IRA conversion apply if you have multiple Roth NOT traditional IRAs?

This is a follow up of the question here about rolling over traditional IRAs to 401k. The pro rata rule looks at the amounts in all your traditional IRAs when you do a backdoor Roth conversion. Does ...
heretoinfinity's user avatar
3 votes
2 answers
591 views

Can I regularly direct funds to a different retirement account?

I don't like my company's retirement plan sponsor. I feel their array of investment options are quite poor (poor because they don't have many options, their expense fees are high, and they don't offer ...
Cameron's user avatar
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3 answers
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What are the reasons to avoid rolling over IRA into 401k plans?

Are there reasons for and against doing this? For I can only think of having more options for what securities to buy in IRAs since 401k options are limited. Against The only reason to do the IRA ...
heretoinfinity's user avatar
3 votes
1 answer
330 views

Contribution limit differences between 401k and IRAs

Is there a reason why the contribution limits of these are drastically different with the 401k limits being about three times higher? Moreover, why is it that the 401k limits go up over the years but ...
heretoinfinity's user avatar
2 votes
3 answers
156 views

Is there a grace period for getting money back out of your 401k plan?

Is there a "grace period" on getting that money back out? For example, if I put $3000 in in April, and I need that $3000 in May, can get it out before the end of the year, can I just pay the ...
Him's user avatar
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10 votes
1 answer
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Is a 401K taxed as regular income when the owner dies?

If an owner takes distributions from a 401K, it is taxed as regular income. If the owner of the 401K dies (with no beneficiaries) the money is put into the estate of the deceased. Is it still taxed ...
Steve Wellens's user avatar
2 votes
1 answer
114 views

What should I do with 401K and HSA to avoid cashing out penalty if I leave the US?

I'm a foreigner working in the US. I know if I don't work or reside in the US anymore, I can roll over to my country's accounts or cash out. But cashing out is subjected to a penalty, so of course I ...
Lacie's user avatar
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1 vote
1 answer
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How can unvested assets land in one's Self-Directed Brokerage 401(k) account?

I read in a US-based employer-sponsored 401(k) plan managed by Vanguard the following warning while attempting to change the contribution allocation: All Sources: Your plan has restrictions on having ...
Franck Dernoncourt's user avatar
3 votes
1 answer
148 views

How do I control how dividends are reinvested in my 401(k)?

I have a 401(k) through Ascensus. I would like to do tax loss harvesting with an index fund I hold in my taxable account and I want to make sure there is no possible wash sale in my 401(k). Therefore, ...
Craig W's user avatar
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6 votes
3 answers
731 views

Financial efficiency - purchasing a car with cash from retirement withdrawal vs. by financing

When someone in their retirement is purchasing a car, is it financially more efficient for them to take a lump sum of cash out of a deferred-tax retirement account (and pay income tax on it), or is it ...
Keith's user avatar
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2 votes
1 answer
146 views

Borrow from 401k (and pay interest to myself) or take a loan from bank (and pay interest to the bank) to buy a car?

Should I borrow against my 401k at 6% interest rate (which I pay to myself) or take a loan through a bank at 3.5% interest rate (which is paid to the bank)? Buying a car for my kids and can't afford ...
Tina's user avatar
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1 vote
2 answers
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Does Highly compensated employee designation for 401k plans consider total income from multiple jobs?

Looking for guidance on following situation: If someone works for two employers who both offer 401k. Is the HCE qualification based on the compensation from the EMPLOYER for which the employee chooses ...
kosa's user avatar
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2 votes
1 answer
61 views

401k Matching Rules Regarding Losses when Match is Revoked

My employer matches my 401k but it is on a long vesting schedule and I will almost certainly leave before it finishes vesting. I know I will have to give it back but was wondering how to gains/losses ...
Gerold Astor's user avatar
1 vote
1 answer
111 views

How do I reverse an excess 401K Contribution?

I contributed around 10K with no employer match. I changed jobs in the mid year, now the I have new 401K with Match. I want to max it out so I can get the match in full. How do I take out the ...
Kint Kant's user avatar
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1 vote
1 answer
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Is there a penalty for rolling a 401(k) into new employer while the markets are down?

I have a 401(k) account with my old employer which I have not rolled over yet to my new employer. As I am no longer contributing to the old account or employed by them, I am wondering if there any ...
penguin359's user avatar
1 vote
1 answer
132 views

Can contributing to 401(k) make me eligible for Roth IRA?

In 2022, the Roth IRA contribution limit reduces from $6000 to $0 for as income increases from $129k to $144k (for a single filer). The 401(k) limit is $20,500. If my salary is $145k (too high for ...
yoozer8's user avatar
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5 votes
1 answer
1k views

What are the Italian equivalents of 401K, Roth IRA and Savings account?

I am Italian and I consume a lot of internet content about saving and investing (that's why I am here too!). I often hear or read about: 401K Maxing out your 401K (and meeting your employer's match) ...
Lorenzo's user avatar
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1 vote
1 answer
187 views

Do you get any social security credits if you put 100% of your income in a 401(k)?

Scenario: Your spouse is the primary earner You had a 1099 side-job earning $15k You put all $15k in a solo-401(k) plan Would you earn any social security credits in this situation?
Philip's user avatar
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1 vote
2 answers
589 views

Does 401k contribution to index fund pay dividends?

My 401k fund has an option for investment in S&P 500 index fund, however the investment doesn't come with any dividend yield. S&P 500 index funds such as VOO, SPY come with a dividend yield. ...
ewr3243's user avatar
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0 votes
2 answers
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Why is the YTD return for my 401k contributions down 20% but the YTD return on S&P500 is 1.5%?

I imagined that my 401k investments must be going to some low-risk-stable-return type of financial investments. However, when I checked the YTD return on my 401k contributions for this year, it was ...
Abhinav's user avatar
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2 votes
1 answer
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How to contribute capital from 401k or IRA to a Series LLC?

I am new to this thread and I'm seeking some basic advice or comment for this matter. Please assume that any investment risks are taken into consideration. Objective: I would like to bootstrap an ...
Phill Alexakis's user avatar
0 votes
2 answers
66 views

If I have a Roth 401k, what would making after-tax contributions mean?

(To start, i know the Roth 401k uses after tax dollars, and i know that the IRS allows further “after-tax contributions.” This makes it seem kind of confusing, as it would appear I’m asking about ...
achao's user avatar
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3 votes
0 answers
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Tax calculation question from Forbes article

From this article, When To Use Pre-Tax Vs Roth 401(k) Contributions, I'm confused on how the 31% difference was calculated from the given example: For example, if your household taxable income is $500,...
selfLearning96's user avatar
2 votes
1 answer
175 views

Can I roll over my Roth IRA into 401(k), and should I?

I have an Roth IRA through Wealthfront that I opened several years ago. I also have a company 401(k) through Fidelity NetBenefits. Since the Roth IRA is a personal account (no employer match, no ...
micahmo's user avatar
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4 votes
3 answers
919 views

What is the difference between a 401k rollover vs IRA?

I have a Fidelity account for my older company's 401k plan which will expire soon. They told me if I don't do anything, it will convert into an IRA automatically. Alternatively I can make a rollover ...
Tina J's user avatar
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13 votes
2 answers
4k views

Employer tax benefits of 401k matching vs salary increase

I was trying to understand why a company would offer 401k matching instead of higher salaries to employees. I read that some states require companies to offer retirement things which makes sense. One ...
roobee's user avatar
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1 vote
2 answers
144 views

Can I put my raise into 401k without a change to my paycheck & taxes?

I received a 2.5% raise. My HR website says : per paycheck (13%) : (12% before tax + 1% Roth 401k) and Getting Full Company Match Yes If I take home $X/week, change my contribution to 15.5%, will ...
Marinaio's user avatar
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2 votes
0 answers
122 views

Identity theft issue: Fidelity showing another person’s profile on my 401k, Fidelity closed the request

My employer provides 401k and I opened a 401k with Fidelity in September. I have been contributing to the 401k since. Recently, I logged into my account and my user profile on Fidelity is showing a ...
Abdullah Rahman's user avatar
2 votes
1 answer
50 views

How are 2nd year tax filing for coronavirus related early withdrawal entered?

I need help understanding how/where to enter the 2nd year's worth of the 3 year spread of tax on 2020's coronavirus 401k withdrawal. How do you file the 2nd and 3rd year? The first year I got 2 1099R'...
Captain Claptrap's user avatar
1 vote
2 answers
296 views

My Schwab 401k account has been emptied inexplicably, can I get my money back?

Today, while I was preparing my 2021 tax, I was checking my 401k account and shocked that my account is empty. Somebody sold my ETF holding and transferred out on Sep 01 2021. It's Saturday, nobody ...
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