What to do after contributing to pre-tax 401k?
Finance noob here. I started work in august and hit my 18.5k limit for my traditional 401k recently. We use fidelity and I opened a Vanguard Roth ira recently but have no idea what to do next. Do I just contribute a set percentage to after-tax on fidelity and roll over to vanguard? And how do I mega back door Roth ira? Also do I start contributing to traditional 401k starting January 2019? sorry I have no idea what I'm doing...
If you're under the Roth IRA contribution limit, get your $5.5k ($6k next year) in that. If you're over there limit, do a backdoor Roth. Then if you can still save more, do post-tax contributions to your 401k and then call Fidelity periodically (quarterly, or however often your plan allows) and tell them you want to convert to Roth 401k. You might even have the option to do the conversion automatically (Microsoft has that option with Fidelity, for example). Backdoor Roth and Megabackdoor are two separate concepts, and you should take advantage of both if you can.
For the 5.5k Roth IRA, what part on fidelity do I change my contribution? Is it just after tax?
Can you elaborate a bit on why do post tax contribution to 401k vs pretax ? Also doesn't post tax 401k mean Roth 401k ? Why do you have to call and convert.
Contribute to your HSA if you have one. It's basically a third retirement account
Do you have kaiser insurance ? If yes , it is more cheaper and no deductibles . Why would you go for HSA with high deductible , if you do have option for kaiser . Specially for family folks , Kaiser is reasonable and cheaper then any deductible ppos
One of the biggest drags on a portfolio, beyond taxes, is fund expenses. Keep your expense ratios down.
trying hard to😓
On a related note, 55k is max with employer matching. What if my employer doesn't match? What's the max for me then?
Depends on your employer. Uber doesn't do post-tax contributions.
Are you saying the max contributions possible is set by the employer?
You can contribute up to 25k after tax which gets auto converted to Roth contributions in Facebook's 401k.
Yes in January 2019 your limits reset so you can again contribute 18.5k to your traditional 401k (as well as 5.5k to IRAs and any after-tax 401k allowed by your plan)
wow aight thats rly good news
Open an E*TRADE account and invest after-tax money in individual stocks. 401ks are great for the match but they limit you to certain funds. Think of E*TRADE as mid-long term savings in addition to retirement.
No need to do that. Use Fidelity brokeragelink if you’re concerned about fund choice. But Facebook probably has decent fund choices. Getting extra money into Roth is just too good to pass up. But after maxing that out then definitely set up your own brokerage account and continue to invest there as well as frauburger says.
Thank you! will do all of those
You can just cut a one time check for your IRA and be done with it for the year at least for your contribution.