- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Can I contribute $18k before-tax to 401(k) and max out Roth IRA at $5,500?
Posted on 12/23/15 at 10:57 am
Posted on 12/23/15 at 10:57 am
I always assumed I could max out both, but when I logged in to my 401(k) this morning I saw this note:
"Special note about IRS contribution limits for 2016: In 2016, the IRS before-tax and Roth contribution limit will remain at $18,000. For those turning age 50 or older in 2016 and contributing the maximum amount permitted by the plan, the catch-up contribution limit will remain at $6,000, for a total IRS contribution limit of $24,000."
Which makes me question my ability to do both. Is the "best" I can do max out the Roth at $5,500 and contribute $12,500 before-tax to the 401(k)?
If I were trying to save $23,500/year what is the best way to structure it?
Thanks in advance.
"Special note about IRS contribution limits for 2016: In 2016, the IRS before-tax and Roth contribution limit will remain at $18,000. For those turning age 50 or older in 2016 and contributing the maximum amount permitted by the plan, the catch-up contribution limit will remain at $6,000, for a total IRS contribution limit of $24,000."
Which makes me question my ability to do both. Is the "best" I can do max out the Roth at $5,500 and contribute $12,500 before-tax to the 401(k)?
If I were trying to save $23,500/year what is the best way to structure it?
Thanks in advance.
2
Posted on 12/23/15 at 11:10 am to Amory Blaine
Yes, you can contribute $18 to a 401(k) (Roth or traditional) and $5500 to an IRA (Roth or traditional). I'm happy to say that I've been maxing both a traditional 401 and a Roth IRA for years with no problems.
ETA: The comment you saw refers to 401(k) limits, which can be either Roth 401 (post-tax) or traditional 401 (pre-tax). Has nothing to do with an IRA of either flavor.
ETA: The comment you saw refers to 401(k) limits, which can be either Roth 401 (post-tax) or traditional 401 (pre-tax). Has nothing to do with an IRA of either flavor.
This post was edited on 12/23/15 at 11:12 am
Posted on 12/23/15 at 11:48 am to Amory Blaine
You can contribute to both a 401K and a Roth IRA, provided you don't exceed the modified AGI limits (for 2016, this is 184K-194K for married filing jointly).
If you exceed that modified AGI limit, then you can go the "backdoor" Roth which i have no issue with but other professionals think the IRS won't like that.
If you exceed that modified AGI limit, then you can go the "backdoor" Roth which i have no issue with but other professionals think the IRS won't like that.
This post was edited on 12/23/15 at 11:49 am
Posted on 12/23/15 at 12:07 pm to foshizzle
quote:
ETA: The comment you saw refers to 401(k) limits, which can be either Roth 401 (post-tax) or traditional 401 (pre-tax). Has nothing to do with an IRA of either flavor.
Thanks. That makes sense... Feeling a little idiotic for not picking up on that.
Posted on 12/23/15 at 12:22 pm to LSUFanHouston
quote:
If you exceed that modified AGI limit, then you can go the "backdoor" Roth which i have no issue with but other professionals think the IRS won't like that.
it doesn't work if you have a traditional IRA from a 401k rollover.
Posted on 12/23/15 at 12:54 pm to Hawkeye95
quote:
it doesn't work if you have a traditional IRA from a 401k rollover.
Well, you would have to pay tax on the movement from Trad IRA to Roth IRA.
With the backdoor, you are still paying tax on the contribution (because you are funding the trad IRA with non-deductible contributions) but you are converting it to the Roth so quickly that taxable earnings don't have time to pile up.
Posted on 12/23/15 at 1:07 pm to LSUFanHouston
I think he's referring to the pro rata formula here. Since he's already rolled over a 401k to an IRA, he can't make a fully non-deductible contribution then conversion and avoid being taxed and avoid being taxed.
Posted on 12/23/15 at 2:04 pm to LSUFanHouston
quote:
You can contribute to both a 401K and a Roth IRA, provided you don't exceed the modified AGI limits (for 2016, this is 184K-194K for married filing jointly).
Do 401k contributions lower my MAGI?
Posted on 12/23/15 at 2:40 pm to The Easter Bunny
quote:
Do 401k contributions lower my MAGI?
Yes, as long as it is to the traditional 401k (not Roth 401k) and it's pre-tax contributions not post tax.
Posted on 12/23/15 at 3:49 pm to The Easter Bunny
Yes, because they lower your taxable wages, which means when the amount of wages is reported on the 1040, it's already reflected the fact that you made these contributions.
Again, as another said, this is assuming these are not Roth contributions.
Again, as another said, this is assuming these are not Roth contributions.
Posted on 12/23/15 at 5:54 pm to LSUFanHouston
Excellent. Finally starting to push on income limits for the Roth, but was assuming my pretax 401k contributions would save me for another few years
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News