4%, b/c company will only match to 4%.
Gecco Wrote: ------------------------------------------------------- > so amber, did your pension vest immediatly? they > match with stock - haven’t heard of that one? > that is crazy to encourage lack of diversifiaction > in a retirement account. No, 3 years for the pension to vest, but when they got rid of it, they gave us everything that was in it. Yeah, financial company, giving us company stock. Bunch of BS. Kind of Enron like…
Yes, using the Roth. Hopefully soon I will make too much to be able to take advantage of it! Right…
just another idea… If you are planning on going back to school full time (and quiting work) you can roll your 401K into an IRA and covert it into a Roth the tax year that you are in school and not making any money. This should make the taxes payable a lot lower than they would otherwise be if you had a lot of income and were consequently in a higher tax bracket. Max income for conversion is 100k AGI, but thats phased out in 2010.
KJH Wrote: ------------------------------------------------------- > A new way of retirement investing includes tax > diversification. Place as much as you can in the > 401k and also put some in a Roth thereby taking > advantage of all available tax breaks. Tax diversification is not a new strategy, its just picked up steam since 1998 and the advent of the Roth IRA and more recently with the Roth 401k. In the 80’s and 90’s insurance guys sold cash value life insurance as tax diversification with the plan to take tax-free withdrawals/loans during retirement. Just out of college (early 90’s), an insurance agent approached me and tried to sell me a life policy as replacement for 401k contributions…“Buy for your future family”…sick. I have zero clients that qualify for a contributory Roth IRA, but I certainly recommend all or a portion of contributions to a Roth 401k (if available to them). I contribute $15,500 to the Roth 401k and get a 2% match to my pre-tax 401k.
There is no income limit on the Roth 401k. Akanska’s on the money, although the conversion rules changed a recently (you no longer need to go from 401k to IRA to Roth).