UPS doesn't match 401(k) contributions, but...

[The Driver]

...is there any possibility that they ever would? And, more importantly, would the company ever retroactively match contributions made to traditional 401(k) plans if something like the Central States Pension Fund became insolvent and UPS finds a way to not take over the pension plan? Would this be possible, legal, or smart from their point of view and use the retroactive contributions as a tax loophole?

Probably a stupid question that's totally out of the realm of any precedent or possibility. But I'm trying to decide if I should switch over contributions to the Prudential Roth 401(k) plan or start a new plan outside of work (like a Vanguard Roth IRA plan) for possibly lower fees than we pay now.

Thoughts?

 

[By The Book]

...is there any possibility that they ever would? And, more importantly, would the company ever retroactively match contributions made to traditional 401(k) plans if something like the Central States Pension Fund became insolvent and UPS finds a way to not take over the pension plan? Would this be possible, legal, or smart from their point of view and use the retroactive contributions as a tax loophole?

Probably a stupid question that's totally out of the realm of any precedent or possibility. But I'm trying to decide if I should switch over contributions to the Prudential Roth 401(k) plan or start a new plan outside of work (like a Vanguard Roth IRA plan) for possibly lower fees than we pay now.

Thoughts?

If your wanting to contribute to your 401k after tax, can you not do this already by choosing this option on the plans website? (After tax contribution amount).As far as the company retroactively doing this, not going to happen. Probably not possible,legal,or smart on their part. There are programs in place to guarantee a portion of your pension, if your plan was to become insolvent.

 

[The Driver]

I just decided to start allocating my entire contribution to the Roth 401(k). That seems to be the best course of action for me.

 

[By The Book]

I just decided to start allocating my entire contribution to the Roth 401(k). That seems to be the best course of action for me.

It sounds like you are the type to be prepared, and that's a good thing. Everyone's situation is different with respect to how much to put where. I would ask your tax preparer how much percentage wise to have taken out of your check so you don't pay taxes at the end of the year. If you are needing more money upfront this may be a way to do it.

 

[The Driver]

I just live cheaply and budget every month. I just like the idea of being able to withdraw tax-free at retirement.

I've been doing a lot of research lately. Probably too much. I need a life

 

[rod]

I just live cheaply and budget every month. I just like the idea of being able to withdraw tax-free at retirement.

I've been doing a lot of research lately. Probably too much. I need a life

Why do I get the feeling that in the future they will find someway to tax your "already paid the taxes on it" Roth fund. Read my lips----NO NEW TAXES

 

[BakerMayfield2018]

Why do I get the feeling that in the future they will find someway to tax your "already paid the taxes on it" Roth fund. Read my lips----NO NEW TAXES

 

[rod]

 

[Brownslave688]

Why do I get the feeling that in the future they will find someway to tax your "already paid the taxes on it" Roth fund. Read my lips----NO NEW TAXES

They may but it'll be no different than w regular 401k then.

 

[Ms.PacMan]

Probably a stupid question that's totally out of the realm of any precedent or possibility. But I'm trying to decide if I should switch over contributions to the Prudential Roth 401(k) plan or start a new plan outside of work (like a Vanguard Roth IRA plan) for possibly lower fees than we pay now.

Thoughts?

The index fund fees in our 401k are lower than the Vanguard index funds (S&P 500, 400, Russell 2000).

 

[oldngray]

The index fund fees in our 401k are lower than the Vanguard index funds (S&P 500, 400, Russell 2000).

It depends on which Vanguard fund. Some have lower fees, others don't.

 

[IVE GOTTA PACKAGE 4U]

It depends on which Vanguard fund. Some have lower fees, others don't.

Vanguard has many more funds to choose from.

 

[oldngray]

Vanguard has many more funds to choose from.

I like the Vanguard Admiral funds. Higher minimum investment requirements but very low costs.

 

[IVE GOTTA PACKAGE 4U]

I like the Vanguard Admiral funds. Higher minimum investment requirements but very low costs.

They will also convert to Admiral shares, once you put enough money in.

 

[upschuck]

They may but it'll be no different than w regular 401k then.

Except you already paid taxes on them once.

 

[brownmonster]

Except you already paid taxes on them once.

The fair way would be just to tax the capital gains, not the original investment.

 

[Brownslave688]

The fair way would be just to tax the capital gains, not the original investment.

That's how it'll be done if they ever tax Roth accounts. Otherwise it's double taxation.

 

[Ms.PacMan]

It depends on which Vanguard fund. Some have lower fees, others don't.

Not one single Vanguard fund has lower fees. VTSAX which is VG Total Stock Market admiral shares has an expense ratio of .05 which is the same as our 401 k Balanced fund.

401K Bond index .03
Balanced fund .05
S&P 500 .01
S&P 400 .02
Russell 2000 .03

and a person can't put $18,000 this year in a tax deferred acct. or a Roth except in a 401k.

------------------------------------------------------
I keep reading this so let me say it again....The after tax designation in our 401k is NOT the same as a regular 401k contribution.

The options are a regular 401K or a Roth. After tax is different.

 

[olroadbeech]

you can do both depending on income. we sheltered 35k a year between 401k and IRA since spouse did not work.

helped me retire 5 years earlier.

 

[Ms.PacMan]

Fund Current Fee1 New Fee1
(as of 10/1/15)
Bond Market Index Fund 3.00 bps 2.50 bps
Balanced Fund 5.00 bps 4.25 bps
S&P 500® Equity Index Fund 1.00 bps 0.75 bps
S&P Midcap 400 Equity Index Fund 2.00 bps 1.50 bps
Russell 2000 Index Fund 3.00 bps 2.50 bps
U.S. REIT Index Fund 7.00 bps 6.50 bps
International Index Fund 5.00 bps 4.00 bps

The 401K is lowering some fees. Got the email today.