And which one do you choose and why?
Base pay pre tax 401k
Variable pay pre tax 401k
Base pay roth 401k
Variable pay roth 401k
After tax
Morgan Stanley U+1F438Mar 13, 2019
Base pay means the retirement contribution will come out of your base salary.
Variable pay means it will come out of your bonus
Pre-tax 401k means the contribution is not taxed now, but when you withdraw instead.
Roth 401k means the contribution is taxed now but now when you withdraw
Now just mix and match.
Morgan Stanley U+1F438Mar 13, 2019
Also you can usually choose a mix. For example, you might want to contribute 3% from base pay pre-tax, and 2% from variable pay post-tax.
How you decide the mix depends on what you think is best.
Base pay means the retirement contribution will come out of your base salary. Variable pay means it will come out of your bonus Pre-tax 401k means the contribution is not taxed now, but when you withdraw instead. Roth 401k means the contribution is taxed now but now when you withdraw Now just mix and match.
Also you can usually choose a mix. For example, you might want to contribute 3% from base pay pre-tax, and 2% from variable pay post-tax. How you decide the mix depends on what you think is best.