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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2
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1answer
325 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
39 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. ...
2
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1answer
202 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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0answers
60 views

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
93 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 ...
0
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1answer
64 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 ...
2
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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 ...
2
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2answers
178 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
3k views

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
161 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. ...
3
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3answers
121 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 ...
31
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4answers
13k views

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 ...
4
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2answers
198 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
163 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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6answers
1k views

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 ...
2
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1answer
101 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 ...
3
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1answer
129 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
78 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 ...
1
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1answer
159 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 ...
0
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2answers
196 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
54 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 ...
4
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1answer
215 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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3answers
212 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 ...
2
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2answers
133 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 ...
4
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2answers
193 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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0answers
170 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 ...
2
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3answers
230 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
120 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
79 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 ...
2
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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 ...
7
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1answer
441 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
252 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 ...
1
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1answer
92 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 ...
1
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5answers
310 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 ...
1
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2answers
128 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
220 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
193 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
355 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 ...
24
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5answers
16k views

401(k) investment after being fired. Do I own it?

A friend was released from their job after 4 years, not vested. I understand 5 years are required to be vested. Are they entitled to the contributions they made to the 401(k)?
2
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1answer
101 views

Fidelity 401(k) investment

I have started investing in a 401(k) recently. I have few questions on how Fidelity 401k investments work. Choosing Investments: Let's say I didn't choose any investment options, does that mean my ...
13
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9answers
5k views

Should I increase my 401(k) contributions, or increase my mortgage payments

I have about $150k remaining to pay on my mortgage. There are 7 years left at a 3% interest rate, then after that the rate goes variable and increases to about 10%+. There's no penalty for paying the ...
3
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0answers
64 views

HCE Excess Refund on 401k Plan

This year, I received a letter from the company I worked for notifying me that they did not pass the 401k non discrimination test. As a highly-compensated employee, I received an excess refund check ...
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2answers
116 views

Tax on IRA and 401K to Roth conversion

I have a 403b account with my employer, a simple IRA account, a SEP IRA account, and a Roth IRA account. My wife has a simple IRA account, a Roth IRA account and a rollover IRA account from a previous ...
8
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4answers
4k views

Why is my 401k manager recommending me to save more?

I am currently contributing enough to hit the limit (~$18000) per year and get a match of 100% for 4% of it. My 401k provider (Fidelity) just sent me a quarterly progress email and suggests that I ...
12
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3answers
5k views

Should I prioritize my 401(k) over my student loans?

Lately things have been a bit tight. Between student loan payments, my HSA, my 401(k) and bills my account balance isn't going up or down, its stagnant. I am wondering if I should decrease my savings ...
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0answers
155 views

What recourse do I have if I was auto-enrolled into an employer's 401k plan despite opting out?

I started my new job on April 1, 2019 and at the first meeting with my manager I asked my new manager how I could dis-enroll or un-enroll from the 401K plan rather than be auto-enrolled @ 4%. He didn'...
5
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2answers
238 views

Employer overpaid me by mistake and wants the gross pay back, including 401K contribution and taxes

My last week's pay at my former employer was paid out twice. They want their money back, which I will gladly do, but here is the problem: Part of the gross pay went to my 401K (no company match ...
5
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2answers
187 views

401(k) seems to be in 'limbo'?

I have worked for a large multinational in the US for many years and whilst working with them, I have built up a sum of money in a 401(k) with Fidelity. However, about 2 years ago, my division within ...
3
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0answers
144 views

Should a Canadian working in the USA, invest in a 401k, Roth IRA, Traditional IRA, and/or RRSP?

I have a cousin who is a Canadian citizen working in the USA, asking me about the Canadian RRSP. However being an American I am more familiar with 401k, Roth IRA, and Traditional IRA. 1) From ...