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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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401K Rollover Tax Question

I recently rolled over my employee 401k to an IRA at a different financial institution. In that 401k, I had made both taxable and nontaxable contributions. Since retiring, I’ve been receiving required ...
Kalliekaykat 's user avatar
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1 answer
184 views

I am 63 with a Heloc at 9%. Should I pull from my 401K to pay off this high interest Heloc

I am 63 with a $37,000 dollar Heloc at 9%. Should I pull from my 401K to pay down this high interest Heloc and start putting the extra money away to build my savings. We have $950,000.00 in our ...
OneCuteBunny's user avatar
1 vote
1 answer
63 views

Minimizing or avoiding penalty for early withdrawl of IRA and 401k

A friend of mine came to US to work for few years and he is forever going back to his original country because of personal reasons. He contributed to IRA, 401k and would like to take the money with ...
ewr3243's user avatar
  • 193
2 votes
4 answers
5k views

Can my employer reverse last year’s payroll and put the money towards my 401K

In January 2023, my salary was below $150K, so I bought a Tesla thinking that I can get the $7500 federal EV credit. Fast forward 9 months and my landlord increased my rent by 25%, forcing me to buy a ...
DAN BHATT's user avatar
  • 129
9 votes
3 answers
2k views

Cashing in personal retirement for real estate

I’m currently a 40 yr old military officer approaching 20 years of service, after which I will retire. My retirement income from my service will provide ~$60k per year for the rest of my life, plus ...
Jake's user avatar
  • 91
0 votes
1 answer
192 views

Rollover former employe's 401k after backdoor Roth IRA conversion?

I am no longer at my former employer but I have an existing 401k plan with Vanguard through them. 30% of the contributions were pre-tax. (traditional 401k) 70% of the contributions were post-tax. (...
Raj's user avatar
  • 693
4 votes
2 answers
3k views

Move money from former employer's 401k to Roth IRA and Rollover IRA

I am no longer at my former employer but I have an existing 401k plan with Vanguard through them. 30% of the contributions were pre-tax. (traditional 401k) 70% of the contributions were post-tax. (...
Raj's user avatar
  • 693
2 votes
3 answers
639 views

Contributing over the 401(k) limit vs investing in an index fund?

I find myself in a lucky position. I have a stable, high-paying job that allows me to achieve nearly all my financial goals, including: Maxing out the yearly contributions to my 401(k), including ...
Tyrian's user avatar
  • 21
2 votes
1 answer
174 views

Employer has been acquired. Rollover 401(k) before plan changes?

I currently have a 401(k) plan from my employer at Institution A. I also have a rollover IRA at Institution A (with funds from prior employers' plans). My employer has been acquired, and have ...
Theodore's user avatar
  • 121
3 votes
1 answer
574 views

Is it correct that I can have a 2023 deduction for 401k that is treated by the provider as a 2024 contribution?

My last paycheck from 2023 was dated Friday, 12/29. Every date in the payperiod is within 2023. I noted my payroll explanation shows the deduction occurring for me in tax year 2023. Today, the 401k ...
user662852's user avatar
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0 votes
2 answers
468 views

Can I take contributions out of traditional or roth 401(k) before 59 1/2 without penalty?

Can I take contributions out of a traditional or roth 401(k) before 59 1/2 without penalty? I'm basically looking for this table and cannot find it anywhere, please let me know if any of the below is ...
Katsu's user avatar
  • 525
3 votes
2 answers
8k views

Roth 401k - Contributions are not going in as after tax?

So, I have a Roth 401k with my employer. I always thought that the Roth meant that I am contributing after-tax dollars into the account. I just realized the following: For simplicity, let's assume: I ...
Raj's user avatar
  • 693
13 votes
2 answers
4k views

Can you self-direct a 401k to buy you a house?

So, this question came about because I was playing thought games. It is my understanding that a 401k isn't really an account type, but a thing with the tax code. Most employer sponsored 401k accounts ...
Elros's user avatar
  • 303
0 votes
1 answer
45 views

Excess deferral to AFTER-TAX, NON-ROTH 401K bucket. Will I be double-taxed/penalized?

I recently went over the 66k limit for employer + employee contributions to 401k with my most recent paycheck (I have one paycheck left for the CY). I'm under the 22,500 pre-tax limit. I called ...
dbugg's user avatar
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1 vote
1 answer
257 views

Rolling over Traditional 401(k) affected by Pro Rata

I currently have three retirement accounts: Account A: Traditional IRA with Pre-tax money Account B: Traditional IRA with Post-tax money (used for backdoor Roth IRA) Account C: Roth IRA Account D: ...
davyli's user avatar
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0 votes
0 answers
71 views

What is my best option to reduce Tax Liability on an unpaid 401K Loan from a previous employer?

I lost my job in June 2023 and I had 2 outstanding 401K loans. Unfortunately I could not secure a job until 2 months later and had to use severance to pay bills instead of paying these loans back. ...
Vince D.'s user avatar
0 votes
1 answer
80 views

Excess deferrals to after-tax, non-Roth 401k (just happened this paycheck) – just ask the plan for a reversal? Tax implications? MBDR implications?

It’s hard to google this/find this specific situation for advice. My last paycheck deferral on to my 401k (on 12/8/2023) resulted in exceeding the yearly maximum employer + employee = $66K limit. (2 ...
dbugg's user avatar
  • 1
2 votes
1 answer
368 views

Yearly 401k Contribution Limit Question

December 22 is the day of my last paycheck for the year. I'm trying to contribute the maximum allowed by the IRS for the year. Since this is the last paycheck I'll get for the year, would that be ...
Rich's user avatar
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0 votes
2 answers
326 views

How is 401k basis calculated? (Warning, wrong question.)

Normally if you sell one equity and buy another with that money, any gains or losses are reflected in your taxes at the time you do that rebalancing and you have a new cost basis on the new investment....
keshlam's user avatar
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1 vote
0 answers
358 views

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
  • 230
2 votes
1 answer
67 views

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
1 vote
0 answers
122 views

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
0 votes
1 answer
98 views

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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0 votes
1 answer
65 views

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
0 votes
3 answers
700 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
3 votes
2 answers
265 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
  • 141
3 votes
2 answers
409 views

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
1k 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
224 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
4k views

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
  • 253
1 vote
1 answer
101 views

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
  • 137
4 votes
1 answer
597 views

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
9k views

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
441 views

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
  • 263
3 votes
1 answer
170 views

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
  • 9,513
4 votes
1 answer
261 views

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
  • 713
0 votes
1 answer
205 views

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
  • 109
0 votes
2 answers
343 views

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
  • 109
5 votes
1 answer
432 views

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
595 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
  • 131
2 votes
3 answers
139 views

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
344 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
205 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
  • 365
10 votes
1 answer
2k views

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
217 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
  • 169
1 vote
1 answer
155 views

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
190 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
  • 15.9k
6 votes
3 answers
2k 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
  • 195
2 votes
1 answer
246 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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