Hello Bogleheads,
I need some help understanding how this works. So my previous employer gave us the option to contribute to either traditional 401K (t401K)or Roth 401K (r401K), as long as the combined contributions did not exceed the maximum IRS limit. For 2021, I chose a 50:50 approach so 50% t401K and 50% r401K. I then changed my employer after Q1 of 2021 and the new employer only offers t401K.
Here is my question: when I want to specify how much money to contribute to this new employer's 401K plan, do I deduct what I had already contributed to both r401K and t401K or only the t401K of the previous employer's plan?
Thank you for your help and I hope my question is clear.
Question about Roth and Traditional 401K contributions...
Re: Question about Roth and Traditional 401K contributions...
as per my understanding, the total limit for employee contribution for 401K (pretax and post-tax) is 19.5K per year (number of employers does not matter).
I am hoping someone will refute it...
I am hoping someone will refute it...
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Re: Question about Roth and Traditional 401K contributions...
It's an annual IRS limit, not per employer/401k. IRS 402g limit for 2021 is $19,500. 402g encompasses traditional pre-tax and Roth. It does not include traditional after-tax, nor any employer contributions.
You can do an additional $6,500 catch-up between pre-tax & Roth if over 50 years old.
You'll need to track this limit yourself; your new employer's 401k record keeper will not track your old 401k's contributions against the limits.
You can do an additional $6,500 catch-up between pre-tax & Roth if over 50 years old.
You'll need to track this limit yourself; your new employer's 401k record keeper will not track your old 401k's contributions against the limits.
Re: Question about Roth and Traditional 401K contributions...
The limit for "elective deferrals" is $19.5k. That can be traditional 401k and/or Roth 401k and includes whatever goes into the new plan.
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Re: Question about Roth and Traditional 401K contributions...
Thank you all for your helpful responses.
Now if I were to do a direct rollover of these 401K accounts into a brokerage account would it be possible to consider the Roth portion of the 401K as my Roth contribution for the year? My understanding is that I am eligible to contribute additional $6500 to a Roth account separate from the 401K contributions.
Now if I were to do a direct rollover of these 401K accounts into a brokerage account would it be possible to consider the Roth portion of the 401K as my Roth contribution for the year? My understanding is that I am eligible to contribute additional $6500 to a Roth account separate from the 401K contributions.
Re: Question about Roth and Traditional 401K contributions...
A rollover is not part of your annual contribution limit. You can do both the rollover and a contribution if you want. However, the limit is $6,000/$7,000. Not $6,500.xerxes101 wrote: ↑Sun Apr 11, 2021 7:26 am Thank you all for your helpful responses.
Now if I were to do a direct rollover of these 401K accounts into a brokerage account would it be possible to consider the Roth portion of the 401K as my Roth contribution for the year? My understanding is that I am eligible to contribute additional $6500 to a Roth account separate from the 401K contributions.
Link to Asking Portfolio Questions