How much are you contributing to employee pre/after tax per year?

New
wlbdude

New

wlbdude
Sep 6, 2021 18 Comments

First year at a company that provides employee after tax benefit. I'm on target to contribute $19500 in pre tax 401k and $27500 in after tax bringing the total to $47000 per year (still below IRS maximum).

Max'ing 401k makes sense. Wondering if I need to lower the after tax (or maybe contribute more?).

Age: 44
TC: 220k

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TOP 18 Comments
  • Amazon
    wryajbnxm

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    wryajbnxm
    Shouldn’t the company prevent you from over contributing? I didn’t know there was a limit to MB Roth
    Sep 6, 2021 3
    • IBM
      2x43p02d2

      Go to company page IBM

      2x43p02d2
      To answer that question, use a retirement calculator and see if you are on track to meet your goals. If you have little retirement savings now which appears to be what you are doing, I would max your pretax then get as much into roth accounts as you can. Just be careful to leave room for the company match. With 47k contributions only leaves about 10k for the company to deposit those. If their match ends up more than that, you will forfeit anything above.

      It wasn't clear, but you are employing a mega backdoor roth strategy and not just leaving after tax money in the traditional part of the plan, right? I'm not sure I would be contributing so much if you can't do in service withdrawal to roth.
      Sep 6, 2021
    • The employer matches 50% (of 6%), so the maximum match is 50% of 19,500 = 9,750. So OP won't forfeit any match as long as they don't increase contributions from here.
      Sep 6, 2021
  • IBM
    2x43p02d2

    Go to company page IBM

    2x43p02d2
    Make sure to leave room for your company match. With 47k + match seems you are getting close.
    Sep 6, 2021 2
    • I would assume his company would limit him if he would exceed the max with the match? Do companies just stop giving you the match if you're near the limit?
      Sep 6, 2021
    • IBM
      2x43p02d2

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      2x43p02d2
      Depends on how your company does it. Some companies do match in a lump sum at the end of the year. I sure wouldn't chance it.
      Sep 6, 2021
  • You still have 18 more years to retirement, so there's some wiggle room there to make riskier investments elsewhere, but it depends on how much you have in retirement accounts and what you'd with the money if it weren't going those contributions..
    Sep 6, 2021 1
    • New
      wlbdude

      New

      wlbdude
      OP
      Any thoughts on more risky investments?
      Sep 6, 2021
  • NVIDIA
    lotun

    Go to company page NVIDIA

    lotun
    I basically have almost no take home base pay. First half of the year, I am maxing out everything. Second half, I am over-witholding to cover taxes on RSUs and investments.
    Sep 6, 2021 0
  • Amazon
    Sup@

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    Sup@
    How can you afford to contribute that much? Dual income family?
    Sep 6, 2021 2
    • Oracle
      Looking👀

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      Looking👀
      or double or triple jobs
      Sep 6, 2021
    • New
      wlbdude

      New

      wlbdude
      OP
      Double income with 2 kids. To be fair, this is the first year I'm contributing to after tax. I'm making up for some of the monthly deficit in family expenses from savings
      Sep 6, 2021