401k and Roth IRA Questions

[TheSiege]

Ok So lets say I make 120k a year. I am married and my wife does not work. This is a large increase in my salary so I would like to max out my contributions before I become acclimated to this salary.

My employers matches 50% with no limit on 401k. What is my best option. I would like to contribute to both.

 

[Elbryn]

well kinda depends on how much money you're talking but since there is no limit on 401k match, best bet is to put the max 16.5k into your 401k to collect the free 8.25k.
then 5k roth ira contribution thereafter for you and 5k for your wife.
total retirement contribution = 34.75k

 

[summit]

well kinda depends on how much money you're talking but since there is no limit on 401k match, best bet is to put the max 16.5k into your 401k to collect the free 8.25k.
then 5k roth ira contribution thereafter for you and 5k for your wife.
total retirement contribution = 34.75k

pretty much this.

 

[TheSiege]

Ok I was wrong about my 401k My employer matches 100% up to 5% of my salary and they automatically give you another 4%

 

[chusteczka]

Ok I was wrong about my 401k My employer matches 100% up to 5% of my salary and they automatically give you another 4%

I want my 4%.

 

[bignateyk]

So max out both options? I must be missing the question.

 

[Schfifty Five]

Ok I was wrong about my 401k My employer matches 100% up to 5% of my salary and they automatically give you another 4%

That's pretty generous.

So assuming you contribute at least 5% of your salary, they will give you $6K (5% match) and another $4.8K for free?

$10.8K total? That's damn nice.

 

[TheSiege]

Its a gold company, they have lots of money

 

[gorcorps]

Ok I was wrong about my 401k My employer matches 100% up to 5% of my salary and they automatically give you another 4%

I was going to say something... but I don't really know enough about this stuff to confirm my thoughts. All I know is my employer gives an equivalent of 6% match through some absurd method.

 

[BTA]

Max up to what is matched in 401k then max Roth Ira....why is this hard to figure out?

 

[spidey07]

Max up to what is matched in 401k then max Roth Ira....why is this hard to figure out?

Being a HCE he should look at a traditional IRA instead of the roth as he likely can't max out his 401k.

 

[MetalMat]

Being a HCE he should look at a traditional IRA instead of the roth as he likely can't max out his 401k.

401k max is 16,5k. Making 120k it should not be a problem unless you got some billz

 

[spidey07]

401k max is 16,5k. Making 120k it should not be a problem unless you got some billz

No, HCEs are treated differently depending on the participation of non-HCEs. He should speak to a financial planner and his 401ks administrator to find out more and what his real limits are. If he contributes more than his plans limit (which again, is based solely on the contributions of non-HCEs), it will be taxable income.

 

[TheSiege]

Ill be working out of the country so I shouldnt be paying taxes up to like 90k of my salary

 

[dullard]

No, HCEs are treated differently depending on the participation of non-HCEs. He should speak to a financial planner and his 401ks administrator to find out more and what his real limits are. If he contributes more than his plans limit (which again, is based solely on the contributions of non-HCEs), it will be taxable income.

The HCE limit is $110,000 this year. Since he got his raise now, it won't apply until the 2012 tax year (where the limit may or may not increase). And even then, he might not be putting in much more than the rest so it might not matter. That is where your advice to speak to the 401k administrator comes in as good advice.