#401k I will be getting in touch with an accountant too as well but want to get any additional feedback from you all. Current 401k total is 172K -- age 34 In 2016 I changed jobs and joined Uber and did a rollver of 50K from my old employer but this is where I "specifically" asked fidelity to put my money into a type of 401k where I can invest in stocks so the title of the account where the 50K went was called as rolled-over IRA and not your regular 401k. Be advised the money flew directly from Old employer 401k to fidelity and I never touched or cashed and it happened within 4 weeks of me leaving my old employer. -- In 2017 I also started contributing to regular 401K which has a limit of 18-19K and continued contributing towards it. As of 1/1/2020 that 401K has 64K off which 14K is stock profit (I moved it to fidelity brokerage link which allows stock investments) The original 50K account shot up by 58K as I made profits through stock investments (FB, amzn, nvda, appl etc) and now stands at 108K Questions- 1. Was I supposed to pay a tax here on this rollover? even though it happened directly from old emp to fidelity and I never cashed it. 2. If tomorrow I want to withdraw money of 108K account, do I pay tax on capital gains of 58K? 3. Did I screw up anywhere?
You were not supposed to pay any tax for rollover. IRA rollover is pretty common. Like any pre-tax retirement account, you are supposed to pay tax on withdrawals based on your tax bracket at the time of withdrawal. If you withdraw money before the retirement age, you incur penalty. You did not screw up anything, your case is pretty usual. Good job on saving money for retirement.
Thank you very much this is good to know!!
You have a good start but are going to need a lot more to retire. Find a financial advisor to work with, set up a budget and live below your means and save as much as you can now. Max out your 401k and employer match if you have one, and if you save more than the irs limit consider a Roth plan. The first million is the hardest!
Uber doesnt match. I max every year by putting the required 19k or so. I am on h1b so started 6 years ago contributing in 401k
Only blunder is if you are going for backdoor Roth conversations, having money in traditional IRA creates problems
Sorry can you explain what do you mean?
1. If traditional, no 2. Yes with penalty 3. Don’t know
thanks-- I am more concerned with no1 so lets see what accountant says.
You don’t really need an accountant for this. You are totally fine.