Back funding 401k or other retirement accounts

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Kamadenu
Posts: 14
Joined: Wed Jan 17, 2018 9:11 pm

Back funding 401k or other retirement accounts

Post by Kamadenu » Fri Mar 16, 2018 11:20 am

I am close to 40 but only started contributed to 401k the last four years. Is there a way I can fund the retirement accounts to "catch up"? Any remedy fo r late savers like me?

Also Is there anything to we can do to save more in tax defered accounts than

1. Maxing out 401K
2. Roth IRA
3. HSA
4. VA529 to the extent possible

Obviously I am trying to find ways to squirrel away more money to make up for the "lost" years.

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oldcomputerguy
Posts: 3126
Joined: Sun Nov 22, 2015 6:50 am
Location: In the middle of five acres of woods

Re: Back funding 401k or other retirement accounts

Post by oldcomputerguy » Fri Mar 16, 2018 11:35 am

Not that I’m aware of. I believe the past years are past. At this point all you can do is contribute more going forward.

That being said, if you’re maxing out your 401k and IRA accounts, that’s a pretty good start and more than the majority of folks do. You might look at US Saving bonds, they’re not really considered “retirement” accounts but they can be tax-deferred for up to 30 years and aren’t subject to state and local taxes. An alternative would be to open a taxable investing account, invest in tax-efficient funds, and just pay the taxes on the dividends each year.
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.

Darth Xanadu
Posts: 381
Joined: Sat Jan 27, 2018 1:47 am
Location: Middle Earth

Re: Back funding 401k or other retirement accounts

Post by Darth Xanadu » Fri Mar 16, 2018 11:37 am

Kamadenu wrote:
Fri Mar 16, 2018 11:20 am
I am close to 40 but only started contributed to 401k the last four years. Is there a way I can fund the retirement accounts to "catch up"? Any remedy fo r late savers like me?

Also Is there anything to we can do to save more in tax defered accounts than

1. Maxing out 401K
2. Roth IRA
3. HSA
4. VA529 to the extent possible

Obviously I am trying to find ways to squirrel away more money to make up for the "lost" years.
If I'm understanding your post correctly, the answer is no, you cannot contribute to tax-advantaged space once the deadline has passed for a particular tax year.

Remedy is to increase savings rate and save more now and going forward.

Another possible tax-deferred space is Treasury I-Bonds.
"A courageous teacher, failure is."

SRenaeP
Posts: 736
Joined: Tue Jan 19, 2010 9:05 pm

Re: Back funding 401k or other retirement accounts

Post by SRenaeP » Fri Mar 16, 2018 12:01 pm

Check your 401k plan rules to see if you are able to take advantage of mega backdoor Roth contributions. This won't help you for the past but would allow you to supercharge your savings going forward.

-Steph

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