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Message
401k Traditional vs Roth 401k vs Post-86
Posted on 8/16/17 at 3:17 am
Posted on 8/16/17 at 3:17 am
My company offers all three as well as 6% match and profit sharing which is deposited into the traditional.
Presently, I contribute to the traditional first, till I have contributed the 6%. Afterwards I contribute the limit (5,000?) to the Roth. Once limit hit, I fall back to traditional. I also contribute 1% to the post-86.
Does this sound ok?
Edit- we also max out HSA.
Presently, I contribute to the traditional first, till I have contributed the 6%. Afterwards I contribute the limit (5,000?) to the Roth. Once limit hit, I fall back to traditional. I also contribute 1% to the post-86.
Does this sound ok?
Edit- we also max out HSA.
This post was edited on 8/16/17 at 3:43 am
3
Posted on 8/16/17 at 7:00 am to Kolbysfan
Is it a Roth IRA or Roth 401(k)? I think they are different in that the Roth 401(k) doesn't count against the Roth IRA contribution limits. Someone correct if I'm wrong please.
Posted on 8/16/17 at 7:21 am to Kolbysfan
My understanding is the Roth 401k and regular 401k contributions combined count towards the 18,000 limit for 401k's. You could still contribute the max 5500 to a Roth IRA if you're under the income limit. The Roth 401k has no income limit so it let's people above the income limit on a regular Roth contribute after tax dollars.
Posted on 8/16/17 at 10:05 am to Kolbysfan
I assume the OP meant he contributed 5k to a Roth IRA (max is 5.5k). I'm not very familiar with the Post 86 option, but basically you're putting after tax money into your 401k.
You'd be better off putting that 1% into traditional (lower taxes) or Roth (no capital gains). If you have reached the 401k limit of 18k, then you could put after tax money up to 54k.
Though I don't know why anyone would do this. The only reason I can think of is if for some reason the 401k is your only investment vehicle with good options.
Maybe there is some tax situation that would make this beneficial, but wouldn't help most people.
You'd be better off putting that 1% into traditional (lower taxes) or Roth (no capital gains). If you have reached the 401k limit of 18k, then you could put after tax money up to 54k.
Though I don't know why anyone would do this. The only reason I can think of is if for some reason the 401k is your only investment vehicle with good options.
Maybe there is some tax situation that would make this beneficial, but wouldn't help most people.
Posted on 8/16/17 at 7:04 pm to gpburdell
It's my understanding that the Post-86 can be rolled into a Roth at severance.
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