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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2answers
228 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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1answer
59 views

How can I tell if a target date fund has too many fees?

I've read that when investing in a target date fund (401k or IRA) there are often a lot more fees involved than other funds. These are an easy option though if you're not too sure what to invest in. ...
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23 views

Employee and employer 401k contribution limits [duplicate]

From my understanding, in 2020, the maximum an employee can contribute to their 401k is $19,500. The total contribution limit for an employee and employer combined in 2020 is $57,000. Now I understand ...
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2answers
213 views

Are funds mixed between 401k and Roth 401k?

If your employer offers a 401k and Roth 401k plan, are these considered two separate accounts? If I want to contribute the maximum funds allowed for 2020 ($19,500) equally between both, does that mean ...
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136 views

Employee provided 401k account has very limited options. Is there a way I can move to a better account?

My employer-provided 401k has very limited investment options. Mostly I see two options: (1) They have several target-date funds like this: LifePath® Index 2040 Non-Lendable Fund M which supposedly ...
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0answers
103 views

Withdrawing from after tax 401k rollovers to Roth IRA

I have after tax contribution. I have setup Roth in plan conversation. If I rollover that money to a Roth IRA, which I can do since it is after-tax money. Do I have to wait for 5 years to withdraw my ...
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2answers
406 views

Putting all 401k into stable value fund?

The stable value fund option in 401k offers capital preservation with some benefit like fixed income. The market is very volatile. Is it good idea to put all 401k to stable value? My 401k completely ...
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0answers
97 views

Pull money out of old pension and start a stock trading account? [duplicate]

I have 10k in an old pension plan with a company I no longer work for. I have a 401k currently with my present employer and would like to take the 5k and start an stock trading account. Would this be ...
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1answer
125 views

401k rollover being held up by former employer

I was terminated from my job on 5/15/20, on 6/12/20 I initiated a rollover of my 401k from my former employment into another 401k that I have, Principal Financial is the plan administrator, they have ...
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21 views

Untangle post-tax contributions to traditional 401k while staying in a 401k

I know you can untangle post-tax contributions to a traditional 401k by using rollover IRAs, but can you do the same by effecting a 401k transfer? That is, would it be permissible for you to instruct ...
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64 views

Utah state tax for 401K income of a part-time resident

We have about $48,000 Social Security income annually and will receive about $36,000 401K income by the end of next year. We will stay in Utah for the first 3 months next spring and then move to ...
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1answer
41 views

Rollover IRA question [duplicate]

I have a quick question. I had 401K from 2 different past employers - Employer A and Employer B. I opened 2 Rollover IRA accounts - one in Brokerage A and another one in Brokerage B in early 2020. I ...
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4answers
608 views

Is there legal reason for restricting someone under 59-1/2 from an in-service rollover from a 401K to an IRA?

There is a lot of confusing information on the internet regarding this. Additionally, there have been changes made by the IRS later than many articles that someone may find by a web search. I have ...
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1answer
71 views

Calculating a combined savings percentage when saving pre- and after-tax money

This seems like a really simple and obvious question, but I can't find any previous questions on this site that directly address it. Perhaps it's so simple that people find it trivial. Almost all ...
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4answers
2k views

Understand 401k contribution

I decided to add 5% in the 401k from this month and thought it will reduce my tax income but I don't see the much difference in Tax. Can someone help me understand that. My FITW Tax reduced from $459....
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From unemployed to self-employed/freelancer, how is my 401K & IRA setup?

Recently lost my job and decided to try out the freelancer route. I am in my early 40s and I expect to make about $150k before tax. I have a few questions about setting up a my 401k and IRA. Already ...
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2answers
798 views

Why would an employer not allow their employees to perform a “mega Roth IRA backdoor” (i.e., convert from an after-tax 401(k) to a Roth IRA)?

My employer offers a 401(k) plan through Vanguard to its employees. There exist two types of Roth IRA Rollover: Convert from a non-deductible traditional IRA to a Roth IRA (a.k.a., "Roth IRA ...
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3answers
179 views

Which earnings can be withdrawn when making an in-service withdrawal from a 401k?

When making an in-service withdrawal from a 401k with your current employer at under age 59.5, which earnings are you allowed to include in the withdrawal? Are you allowed to withdraw earnings on ...
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1answer
161 views

If I take a home equity loan out can it “add” PMI to my mortgage?

So ironically I took out a 401k loan to avoid PMI on a property we purchased. I've recently left the job where I had the loan and want to repay the balance, but will need to borrow in order to do so. ...
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2answers
145 views

Is it true that when we can contribute $60,000 into pre-tax or after-tax 401(k), it can be all after-tax so we never have to worry about the tax? [duplicate]

Some suggestion is that if we plan to have lower tax bracket when we retire, we can contribute into 401(k) pre-tax instead of after-tax. However, if some people may contribute $60,000 into either pre-...
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101 views

When we retire and take out the 401(k) and IRA money to buy a house, are we subject to a big portion of tax?

Say, when we get to the age of 65 or 67, and retire, and we take out most of the 401(k) and IRA money, if luckily they can grow to $1,000,000 to buy a second house, all at once, will we be subject to ...
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3answers
157 views

Can a client pay directly into an IRA/401K?

I have a leftover 401K from my previous employer (in fact I have two of them from two different employers). Currently, I am drawing some income as a sole proprietor of a management consulting company....
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3answers
537 views

Is there a point to contributing to a nondeductible traditional IRA?

I, 24 y/o US citizen employed in the US, make over the 137k cut off for making contributions towards a Roth IRA. As a result, I have considered contributing to a traditional IRA. However, I am not ...
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1answer
66 views

For the $19.5k limit for 401K contribution in US for 2020, does that include the company matching? [duplicate]

I thought it doesn't include the company's matching, or does the $19.5k actually include the part that the company will match?
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1answer
86 views

The 50% 401K matching and 100% 401K matching can make the total contribution to $29,250 and $39,000, respectively?

Since there is a max for our contribution of $19,500, so (1) if a company matches 50%, that means the total max out at $29,250? On the other hand, (2) if a company matches 100% but only for 4.5%, ...
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9answers
10k views

401(K) Very high negative rate of return

I am 26 yo and have total $27.5k contributed to my 401(K). I have chosen 2045 Blackrock target date fund and my 2020 first quarter rate of return is -37% due to the current market blood bath. I have ...
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1answer
245 views

Is a 401k withdrawal considered “earned income?”

I left my job in 2018, where I earned $3000 that year. At that point I had $500 in a 401k plan, which was too small to do a rollover to an IRA, so I cashed it out (after 20% tax I received $400, and ...
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1answer
129 views

401K Liquidation

I contributed to a 401(k) for the past three years and due to market volatility there is no gain in my contribution. Its hard earned money. Is it possible to sell all the stocks and bonds contributed?...
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2answers
560 views

Ordering of backdoor Roth conversion and rolling over 401k?

I have two retirement accounts: Traditional IRA funded with non-deductible contributions 401k I left my job so I want to roll over my 401k into a Rollover IRA, but I've also heard about the benefits ...
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2answers
52 views

Contributing to a target fund after the date of the fund

If I contribute to a target fund that's targeting 2040 as a retirement date, but I don't end up retiring until 2043 what will happen after 2040? Will I still be able to contribute to the same plan ...
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0answers
58 views

My company switched 401k Providers and the new provider re-amortized my loan and changed the payments

My company switched 401k providers a few years back. Recently I have been playing around with amortization tables in excel and realized that my payment should have been lower. After talking with ...
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1answer
69 views

401K Enrollment Benefits

I have enrolled in my 401K plan from 2016 onward. While looing into the investment portal, right now I am having only 68K but I contributed for 69K. Is it still worth in enrolling 401K? If I invested ...
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1answer
134 views

Do we need to worry about “maxing out” our 401K limit and the company won't match their part any more?

Let's say, if the company would match my 401K contribution, up to 4.5%, and with the current 2020 limit of $19500 and $6500 for age 50 and above for catch up, it is $26,000. Each paycheck every two ...
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1answer
45 views

My Employer Contribution each year Using W2 form

I contribute to my 401K each month but I am not sure how much my employer is contributing each year to my 401K. They said they will match 5% of my salary but I am not able to find that number in my ...
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0answers
25 views

Excess 401k deferral: which account?

I switched jobs in the middle of 2019 and hence have multiple pretax 401k accounts (traditional). I have excessive deferral when I combine my contributions to both accounts (14k to each account) and I ...
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2answers
82 views

With a 401k, can I sign up first, and then switch to different investment types and buy/sell them later?

For example, our company's 401K has an easy choice of "BlackRock US index fund" (for Dow Jones 30 DJI) using Fidelity, and does not require opening a broker account. Should I just start using the ...
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2answers
95 views

Does it matter if one company matches 100% of your 401k contribution vs another company matches only 50%?

Let's say the base salary is $150k, if company A matches 100% of your 401k contribution, but up to 4.5% of your pay. So it is $6750 per year. If company B matches 50% of your 401k contribution, but ...
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1answer
157 views

Is a year-end true-up employer match supposed to be received the next year?

I was browsing a 401(k) account, which has a year-end true-up employer match and is managed by Vanguard. The employee who owns the 401(k) account joined the firm in 2017, and frontloaded their 401(k) ...
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4answers
902 views

How to balance paying off student loans with 401k contributions when employer matches 100%, up to federal maximum?

I've regularly heard the best advice for a young professional is to max out your employer's 401k contributions (maybe 3-5%, or limited in some way), then focus the rest on paying down debts. After the ...
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1answer
78 views

Tax breakdown for bonus income

Say the bonus is $8000 and $6800 are set for a 401k (pre-tax) deduction. Here's the tax breakdown. Does this look right? Shouldn't the taxes be calculated on the $1200? ($8000 minus $6800 due to pre-...
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1answer
83 views

How to file taxes for a backdoor Roth and 401(k) roll-in

I am planning to backdoor $6000 into my Roth IRA for 2019, which currently has nothing in it. I have $2500 in a traditional rollover IRA. I was going to put it into the Roth, but due to the ordering ...
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10answers
17k views

How can I protect my 401(k) when the stock market is performing badly?

I just opened my 401(k) at the beginning of 2017. In 2017 it did great because of the bull market, but since 2018 I've lost about $1,000. All of my contributions this year have been a complete waste. ...
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7answers
47k views

Why I cannot find a “Pure Cash” option in 401k investments?

I am of an opinion that I should decide where my money should get invested and if it should get invested at all or not. When I looked at the investment options I have with my 401k money, I figured ...
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1answer
157 views

Why am I not allowed to add to what my employer deferred for my 401k?

My employer deferred 6% of my income in 2019 to my 401k. I would like to now contribute up to the maximum limit of 19,000 in order to reduce tax liability. However, turbotax is saying that my income ...
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2answers
111 views

I initiated a 401k rollover to an individual IRA, but plan sponsor didn't execute

I got confirmation of my rollover on the phone but checked back 3 days later and the process had not taken place. I did this with the understanding that my fund holdings would be liquidated and then ...
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1answer
64 views

do forced withdrawals on 401K contributions include “interest” accrued on the contributed funds?

So let's say I max out my 401(k) ($19,000 in 2019) and then have a forced withdrawal of $10,000 because my company failed the highly compensated employee test. The $19,000 I put into the 401(k) is ...
14
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7answers
4k views

401k loan & repayment: double taxation?

I've heard a few people say that taking out a loan against your 401K and repaying it means that you are taxed twice: You are repaying your loan using after-tax dollars You are going to be paying a ...
3
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1answer
183 views

Do 401k contributions need to be invested? Can it be left as cash in the account? [duplicate]

As title. Since the market is a bit volatile now, wondering if I can keep the 401k contributions as cash and invest them later. Or does it necessarily need to be invested in one of the options that ...
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0answers
35 views

convert 401k after tax contribution to roth 401k

My company recently introduced a Roth 401K option to the traditional 401k retirement account. I have some existing after-tax contributions (~ $80,000 or so). If I convert this to a Roth 401K, my ...
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2answers
519 views

What are the pros and cons of converting an after-tax 401(k) to a Roth 401(k)?

What are the pros and cons of converting an after-tax (a.k.a. post-tax) 401(k) to a Roth 401(k)? From what I can see: pro: in the Roth 401(k), earnings made on the contributions are tax-free, unlike ...

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