roth401k

[kingOFchester]

Saw this in another thread.

Where can I get info on the Roth401k? I have the 401k prudential, but don't see an option for the roth401k. Thanks for the help.

 

[Brownslave688]

Go to change your contribution rate change traditional 401k to zero and Roth 401k to whatever u want. If you keep the rate the same you will put the same amount into it but u will bring home less. Also your statement is kind of confusing because it's just an overall statement and doesn't split them up.

 

[UpstateNYUPSer(Ret)]

With a traditional 401k, which is pre-tax money, when you increase the % that you contribute you can increase the number of withholdings on your W-4 to keep your take-home pay the same or close to what it is now. Keep in mind that the amount that you contribute comes right off of the top of your gross income for tax purposes so you don't need to have as much withheld throughout the year. With a Roth 401k, which is after-tax money, there is no tax benefit (now) so you would not change your W-4. The tax benefit comes in when you start withdrawing from the Roth as withdrawals are tax-free (for now---don't be surprised if the govt doesn't change this)

 

[brownmonster]

I still don't understand why you change withholding when you increased your contributions. Automatic adjustment based on taxable income.

 

[UpstateNYUPSer(Ret)]

I still don't understand why you change withholding when you increased your contributions. Automatic adjustment based on taxable income.

Keeps my take home pay the same which lets me keep more of my money rather than getting a big refund.

 

[brownmonster]

Keeps my take home pay the same which lets me keep more of my money rather than getting a big refund.

Gotcha.

 

[brownmonster]

You must clear about 600 a week with your new plan.

 

[UpstateNYUPSer(Ret)]

You must clear about 600 a week with your new plan.

$650--this includes $50 UW contribution per week so it would be $700. 35% to 401k. Refund should be around $2K.

 

[Logb17]

35% to 401k.

That is a lot of eggs in one basket

 

[Brownslave688]

35% either u don't make that much or u max out early? That's nuts.

 

[Logb17]

max out?? I didn't think there was a max on a 401k, maybe Roth401k.

 

[Jackburton]

Max for both Roth401k and traditional 401k(pretax) is 17000 for 2012. Any combination of the two can not go over that amount without penalty. If you make 85k (which most drivers should average) setting it to 20% will max you out. If you are intrested in comparing the pros and cons of pretax vs after tax contributions you can google Roth401k vs traditional 401k. Either way you choose I highly recommend that you max it out and forget about it. I personally do 50% in S&P 400, 20 REIT, 10 Russell 2000, and 20 in International. Research your choices depending on the risk you're willing to take and how long before retirement.

Im in no way an expert in the financial decisions of others, only what I've researched for myself. I'm just letting you know how I've allocated my funds. I'm %15 in Roth and 5% in traditional and an aggressive investor.

 

[Brownslave688]

If he is over a certain age not sure what age there is a catch up and I think the max would then be $20,000 but 35% of just $70,000 is still $24,500.

 

[Jackburton]

If he is over a certain age not sure what age there is a catch up and I think the max would then be $20,000 but 35% of just $70,000 is still $24,500.

If you're over 50 catchup contributions max is set for 2012 at $22,500.

 

[kingOFchester]

If you max out the roth401k, can you still do a roth ira?

 

[UpstateNYUPSer(Ret)]

35% either u don't make that much or u max out early? That's nuts.

Why is it nuts? My only debt is my mortgage. I am a FT driver w/7 years left--why shouldn't I max it out?

 

[Jackburton]

If you max out the roth401k, can you still do a roth ira?

The way I understand it, yes. When/if you ever decide to do a seperate IRA, the company you decide to go with could answer that question.

 

[UpstateNYUPSer(Ret)]

The way I understand it, yes. When/if you ever decide to do a seperate IRA with could answer that question.

One is independent of the other.