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4

I treat all accounts -- taxable, 401(k), Rollover IRA & Roth IRA -- targeted for a single purpose as a single unit. Thus, in your shoes, I would KISS and not divide each account in quarters. Specifically, the "... six months expenses is cash" would go in an online savings account, so your other accounts would have to be more heavily weighted towards ...


0

In general, one should be taking one's distributions based not just on one's current tax bracket, but also on what one thinks one's future tax bracket will be. For instance, if someone is currently in the 22% tax bracket, but thinks they'll be in the 12% bracket later, they should not take any distributions now. In your case, if I understand the formula ...


1

@Aganju If OP converts to Roth, that money is still taxed. Albeit, the tax rate is based on current tax bracket which may be lower than future bracket and all gains and distributions are tax free in the future. Think that should be mentioned. As @pete-b mentioned, your beneficiaries are likely to receive a large portion and this too should be considered if ...


10

You should consider the option of converting a chunk into a Roth account every year (instead of into a taxable account). The (small) disadvantage is that it is basically 'stuck' for five years; the advantage is that any further gains are tax-free.


2

Every company I have worked for has limited the percentage of gross pay that could be sent to the 401(k). It has typically been 67%, 75% or in one case 90%. The limit was in place because of FICA, and other possible deduction for optional benefits such as health, dental, and vision insurance. It as also covered optional items such as a donation to charity (...


18

For question #1: A traditional 401K reduces your income, but not your FICA taxes, which means the employer must first deduct the employee portion of FICA from your paycheck, and the remainder is then eligible to be contributed to your 401K. Interesting idea but I don't believe you could offer to pay the FICA taxes on the side to increase the contribution ...


2

There are rules regulating "fairness" amongst all employees in a given companies 401k plan outlined here: https://www.irs.gov/retirement-plans/plan-sponsor/401k-plan-overview Although your proposed scheme may be possible in some circumstances, I would expect that those rules would be difficult to skirt around depending on the distribution of employees that ...


4

Jumping outside the framing of the question: Even if you cannot get a "mega-match", you can get a similar tax advantage if your 401k allows after-tax contributions and in-plan conversions. In this case, you can contribute (after-tax) the allowed remainder up to the combined $57k, and then convert that balance to a "backdoor Roth 401k". You will not owe tax ...


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