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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5
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3answers
230 views

Was 50k loan limit always a part of the 401k program and are there any ways around it?

I got a loan from my 401k that I repaid a while back and I don't remember anything about a $50k limit. Now I am buying a new house before I sell mine and the $50k limit seems to be ridiculous since ...
2
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1answer
48 views

Are there IRS limits for 401k to Roth IRA rollovers?

I am 61 years old and I have two 401k plans from former employers. I want to roll over these 401k plans into a single Roth IRA account over a period of time in several intervals. I would like to know ...
2
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1answer
28 views

Excess 401k Contribution Found After April 15th but before May 17th

Hoping for an answer ASAP. I just found out I have overcontributed to my 401k for 2020 (2 different employers). It's after April 15th so Fidelity can no longer withdraw the excess. However, I haven'...
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0answers
41 views

Can there be different After-Tax contribution limits for HCE and NHCE in a Mega Backdoor Roth 401k?

Is it possible in a 401k plan with Mega Backdoor Roth to have different After-Tax contribution amount limits for each employee depending on whether they're part of the HCE or NHCE group? For example, ...
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0answers
27 views

Which field of W2 is compared with 130k threshold for NHCE/HCE classification?

I understand that many companies use the 125k/130k/etc fixed threshold for classification of NHCE/HCE employees (whereas others use the 20% rule), which field of W2 is used to determine this? For ...
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0answers
39 views

401k refund if an HCE front-loads 19.5k, leaves on March 1, and the ADP test fails?

Let's say it's your third calendar year working for a company with no vested employer match; you're classified as HCE. You make a mistake of front-loading 90% of your income in the first two months, ...
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2answers
598 views

My 401k failed the nondiscrimination test — how to avoid taxable distribution?

As in this question, and this question, my ex-company's 401(k) failed the nondiscrimination test. I've recently received a letter from the company's HR to the effect that I will receive a corrective ...
2
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2answers
554 views

What is a 401k plan in some contracting agency that is 0% to 100% contribution and limited to 25 funds?

I have worked as a software contractor before, for a company and they didn't have 401(k) plan at all. And then I have worked at a different company, with something like, we can contribute, and for the ...
21
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10answers
8k views

Does the “15% into retirement” rule include employer contributions?

I keep seeing that you should be putting 15% of your income (link2, link3) into a retirement account. Does that include the employer match? For instance, if my employer has a 4% match, do I still put ...
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2answers
175 views

At what age can I withdraw from my 401k

I am 61 years old and I don't want to withdraw money from my 401k too soon. I am wondering at what age can I take money from the 401K without being subject to penalty? Thanks
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1answer
52 views

If I don't plan to sell the stock until age 60 or 65 in USA, is it exactly the same in a regular account vs an IRA or 401k account?

With the limitations of how much money we can put in IRA, Roth IRA, or 401(k) account, I just thought, what if we plan to buy the stock and know we won't sell it until age 60 or 65, when our income ...
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0answers
42 views

401k or Roth IRA for non treaty countries

This might be a bit complicated, so pretty please bear with me a little. I am currently living in USA on a E2 visa. My employer offers both 401k and Roth IRA. I do not plan to neither retire nor ...
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3answers
107 views

Optimizing Savings Allocations

I am currently trying to decide the best way to allocate my savings, and I would appreciate your input. I am trying to budget roughly based on the idea of using 50% of my post tax income for ...
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3answers
81 views

Taxes on growth - Traditional vs Roth 401K

Let's say I can put $10K today in my 401K. Let's assume this investment theoretically grows to $100K by the time I retire. Putting aside income brackets for a moment, is it true that if my 401K ...
3
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1answer
43 views

Are employee (NOT employer) contributions to a 401(k) ERISA-protected?

Say you work for a business that offers 401(k) plan. Investopedia says: Under the Employment Retirement Income Security Act of 1974 (ERISA), the funds in your 401(k) only legally belong to you once ...
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2answers
121 views

Taking out a 401K Loan vs. Liquidating Investments - what's better?

Let's assume the following: I need $50K for various expenditures (aka simply spending, not paying off CC debt or putting the money somewhere else). I can either liquidate regular taxable investments ...
15
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4answers
7k views

If I sold some stock by mistake and immediately bought it back, is that sale still subject to capital gain tax in USA?

Today I wanted to buy a few shares of Apple (AAPL), let's say 10 shares. When I handled the UI, there was the "By number of shares" and "By dollar amount" and then "Market&...
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0answers
44 views

IRA contributions income limit [duplicate]

I never calculated my MAGI, but I don't have any student loans, educational expenses or anything like that for that matter. I just claim standard deduction every year. My net income this year is going ...
2
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1answer
121 views

How does 401k loan default after you left your job?

I'm trying to find some basic answers here but having a very hard time. I have a job currently and I'm about to lose it. I have pulled out a 401k loan and paying it back through the payroll deduction. ...
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4answers
896 views

How should I split my contributions to Roth IRA and Roth 401k?

I am in my early 20s and currently contribute ~18% of my income to my retirement accounts, 7% to company sponsored Roth 401(k) (Popular Investment Company) and 11% into my Roth IRA (A "Big 3"...
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1answer
2k views

W8BEN of Indian individual

I need help in filling W8BEN form. I will use this to reduce (or zero) my 401K withholding (whenever I withdraw money) as there is a treaty between India & US. I am not sure what should I fill in ...
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1answer
35 views

How to determine state tax for 401(k) distribution as a part-year resident?

I'm trying to help my in-laws with their taxes and I just want to make sure about something before filing. They bought a home in Texas (no state tax) in the middle of 2020, still maintaining residency ...
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1answer
36 views

Rolling over funds from a traditional IRA into an Individual 401(k) to avoid the pro-rata rule

I expect that in 2022, my income will exceed the deduction limits for a traditional IRA, so any contributions I make to it will be non-deductible. My understanding is that once I make a non-deductible ...
2
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1answer
41 views

Are 401k and IRA contributions reduced for new, part-year, US residents?

Suppose I move to the US partway through the year and start working. I will file a dual-status tax return. My employer offers a 401k plan and I want to contribute as much as I am permitted. I ...
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2answers
97 views

Is 401(k) plan without any matching like an IRA?

I might take a software contracting job, and the agency has a 401(k) plan, but just 0% matching. But it seems a little bit weird: what does it mean, is it a way for us to put more money in than an IRA ...
2
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1answer
73 views

Backdoor Roth vs Mega backdoor Roth contributions

I heard about Backdoor Roth IRA, and Mega backdoor Roth contributions. Are they one and the same? Or are they different? I ask because I know some folks who work for a big tech company in the US that ...
5
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4answers
13k views

Can I move my 401k to another country without paying tax penalty?

I might want to move the money in my 401k from US to Canada. I do not work with my previous employer anymore, but now I am self-employed. Can I do this without incurring penalties?
4
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1answer
338 views

Should I request that my employer reduce my salary to fully max out my 401k?

Conventional personal finance wisdom often instructs one to make full use of tax-advantaged accounts before placing additional savings into other investments. I don't think this is bad advice in ...
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2answers
70 views

Old company 401k was going to move to rollover ira but fidelity delaying me

I have done a lot of research on my old 401k. I do not want to withdraw any of it. I do not want to move it to my roth ira as I would owe taxes on it. I also do not want to move it to my new employers ...
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1answer
29 views

Overpayment at time of 401k withdrawal, during 2020

If, during 2020, one did an early withdrawal funds from a 401(k) and/or IRA, and one elected for extra withholding (above its final tax rate), when would that get returned? Is it handled with the tax ...
11
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4answers
4k views

401(k) cost basis

My first 401(k) started in the early 1990s with some employer matching funds. Since then, there have rollovers, more 401(k)s, and lost records. Aside from a really rough estimate, what happens when ...
11
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5answers
3k views

With tax-free earnings, isn't Roth 401(k) almost always better than 401(k) pre-tax for a young person? [duplicate]

I can start withdrawing from my 401(k) in 30 years. I'm currently in one of the the highest federal tax brackets and will likely be in the lowest tax brackets when I start withdrawing. That alone ...
2
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0answers
36 views

Income taxes - Changing state of residence before moving out of the US

I'm an European citizen working for in the US with a 2 year contract; I was and will be a non resident alien for 2020 and 2021, but RA in 2022; I have to contribute to a retirement fund (it's a 401(a),...
27
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2answers
4k views

Could my employer match contribution have caused me to have an excess 401K contribution?

Could my employer's match have caused me to have an excess 401K contribution? For 2020, I contributed the maximum into my 401k-Roth, $19,500. I also made a catch-up contribution (I'm eligible) to my ...
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0answers
14 views

What will the following year tax burden be on partial repay of an premature 401K withdrawal?

What will the following year tax burden be on partial repay of an premature 401K withdrawal? I quit my job. I have a 401K from the previous employer -- and took out a partial money due to COVID ...
2
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1answer
73 views

Can 401k beneficiaries be structured to pass through to children?

When you name multiple primary beneficiaries of a 401k, the assets can be divided proportionally among the beneficiaries, but the contingent beneficiaries don't kick in unless all primary ...
3
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1answer
621 views

Why is my former employer matching dividends in my 401k?

Here's a screenshot from the recent transaction history (this December) from the 401k from an employer that I haven't been employed by for many years. The index fund in question pays out a dividend ...
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2answers
98 views

Paying Taxes on a Bonus Check

In this article, "How to Avoid Paying Taxes on a Bonus Check" it suggests the following: Strategies to manage the taxes you’ll have to pay on a bonus fall into two camps. First, you can ...
1
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1answer
137 views

Retirement benefits vs. better salary/health insurance

I'm a research scientist and postdoctoral fellow in a US government lab. Currently, my position is funded through a DOE-run organization as an educational/training position. The salary is good for my ...
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2answers
1k views

Why are excess HSA/IRA/401k/etc contributions allowed?

I accidentally made an excess contribution to my HSA (or my employer or HSA custodian made a mistake, it's still not clear). I know what I need to do to correct it, but I'm curious, why is that ...
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0answers
70 views

Withdraw after-tax contributions from 401k without penalty

In my most recent payroll (which included bonuses), I messed up my contribution % for pre-tax and after-tax 401k. I ended up with $10k in pre-tax and $44k in after-tax (+4k in employer matches), when ...
2
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0answers
78 views

Make a SEP contribution to a traditional IRA

I have a traditional IRA with Vanguard that originated as a 401k rollover (so they call it a Rollover IRA). This year I have a lot of self-employment income, and I am qualified to make a SEP IRA ...
0
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1answer
35 views

Computed 401K RoR differs from broker's information

I have a 401k through Fidelity and have recently started being more active in the market. I was haphazardly selecting funds that seemed to do well but apparently wasn't the most advantageous due to ...
11
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3answers
888 views

Do Traditional 401(k), FSA, and HSA contributions reduce your tax liability even if you don't itemize?

I hope people will indulge me what may be a rather dumb question. If you take the standard deduction/don't itemize, does contributing to a Traditional 401(k), Health Savings Account, or flex medical ...
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3answers
155 views

Is there any upside to contributing to the after-tax 401(k) instead of the Roth 401(k) via paycheck deduction?

In some 401(k) plans, one has the choice to configure one's paycheck deductions to go to pretax 401(k), after-tax 401(k) and Roth 401(k): Is there any upside to contributing to the after-tax 401(k) ...
2
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0answers
37 views

What is the point of a retirement plan contribution limits (with after tax dollars)? [duplicate]

Based on the 2021 numbers: 401(k) elective deferrals are limited to 19,500. Limits here make sense as savings offer obvious advantages: pre-tax contributions in case of regular 401(k); non-taxed ...
2
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1answer
40 views

Paying taxes on a converted old retirement account to a Roth IRA from a 401K loan from current employer?

I have an old 403B plan, I am 47 years old and would like to convert part of it to a Roth. I would like to convert $100k to the Roth, but will then have to pay taxes on the conversion. Lets just say ...
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0answers
32 views

401k withdraw penalty free? [duplicate]

Can I withdraw 90% of my 401k funds (I'm under 59 years of age) under the new stimulus bill that was signed in December 2020? Even though the CARES act expired, according to this article https://www....
2
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3answers
90 views

Can I rollover Roth/Traditional 401k into a Roth IRA?

My previous employer offered both a Roth and a Traditional 401k (unclear to me if these are technically separate accounts... as far as I was functionally aware, I had one 401k account, which could ...
0
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1answer
46 views

Where can one view the split between pretax, after-tax and Roth money in one's Vanguard 401(k) account?

The best I could find is https://retirementplans.vanguard.com -> Retirement plan participants -> Manage my money -> Manage my brokerage option, which gives the split between Roth money and ...

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