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Old 07-26-2016, 06:37 PM
 
Location: Portal to the Pacific
5,119 posts, read 5,086,104 times
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My husband just switched jobs and is trying to figure out the withholdings on his paycheck. Looking at his previous employer he appears to have contributed $5k-ish to a Roth and $5k-ish to a traditional 401k. From what we can tell, we've paid taxes on the Roth.

My husband is of the opinion that we can contribute another $13,000 to the new 401k because it's not a tax deferred account and I said, no, that's not true, it's $18,000 between both types of 401ks (roth or traditional).


Which one of us is right?
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Old 07-26-2016, 07:37 PM
 
Location: Central Connecticut
412 posts, read 261,109 times
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Quote:
Originally Posted by flyingsaucermom View Post
My husband just switched jobs and is trying to figure out the withholdings on his paycheck. Looking at his previous employer he appears to have contributed $5k-ish to a Roth and $5k-ish to a traditional 401k. From what we can tell, we've paid taxes on the Roth.

My husband is of the opinion that we can contribute another $13,000 to the new 401k because it's not a tax deferred account and I said, no, that's not true, it's $18,000 between both types of 401ks (roth or traditional).


Which one of us is right?
You are. The combined total of an individual's Roth and traditional 401k's must not exceed the max contribution.
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Old 07-26-2016, 08:08 PM
 
Location: Portal to the Pacific
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Originally Posted by Loriact View Post
You are. The combined total of an individual's Roth and traditional 401k's must not exceed the max contribution.
You mean 401k roth and 401k tradition, right?

IRA is separate, no?

We can each contribute $11,000 to our IRA's and $18,000, right?
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Old 07-26-2016, 08:16 PM
 
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The employee limit to 401k Roth and pre tax combined is 18k it doesn't matter if you are with another company and then 5500 per person for an Ira or Roth IRA in total
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Old 07-26-2016, 09:21 PM
 
Location: Portal to the Pacific
5,119 posts, read 5,086,104 times
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Sorry, I think I created confusion.

The roth is a 401k roth, not a roth ira.

I am right according to Lowexpectations. $18k a year for either/both 401k roth or pre tax. Then we can contribute $11k to our Ira's.
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Old 07-26-2016, 09:35 PM
 
18,845 posts, read 13,587,446 times
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Quote:
Originally Posted by flyingsaucermom View Post
Sorry, I think I created confusion.

The roth is a 401k roth, not a roth ira.

I am right according to Lowexpectations. $18k a year for either/both 401k roth or pre tax. Then we can contribute $11k to our Ira's.
That's correct
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Old 07-27-2016, 04:57 AM
 
291 posts, read 250,151 times
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Quote:
Originally Posted by flyingsaucermom View Post
My husband just switched jobs and is trying to figure out the withholdings on his paycheck. Looking at his previous employer he appears to have contributed $5k-ish to a Roth and $5k-ish to a traditional 401k. From what we can tell, we've paid taxes on the Roth.

My husband is of the opinion that we can contribute another $13,000 to the new 401k because it's not a tax deferred account and I said, no, that's not true, it's $18,000 between both types of 401ks (roth or traditional).


Which one of us is right?
I think your husband may be right.

If he is over the age of 50, then he can contribute up to $23,500 after including a catch up contribution of $5500 to the $18000. If he's already put away "10k-ish" this gives him an additional $13k to put in.

If you are both contributing to 401ks and IRAs and you are both over the age of 50 then each of you has the ability to contribute an additional $5,500 to the 401k and $1,000 to the IRAs as catch up contributions. This is an additional $6,500 each or $13,000 in total.

This assumes you are both working and have your own 401k plans.

Or he could just be saying that after maxing out the 401k of his own plan (if you aren't working) then he can make contributions to his own IRA of up $6500 and you can make a contribution of up to $6500 (as a no working spouse) for a total of $13000.

Maybe the confusion lies in that you said he thinks is can contribute another $13000 to the new 401k plan rather than saying to another tax deferred account. Not sure which of you is confused.

It would also be negligent to not mention that there are income limitations to IRA contribution eligibility and that you may only be able to fund an IRA vehicle as a nondeductible traditional IRA contribution which you can choose to convert to a Roth if you so wish.

Some of what I said may also need to be changed if either of you are over the age of 70.5.

Last edited by Bradmilano; 07-27-2016 at 05:50 AM..
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Old 07-27-2016, 05:01 AM
 
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I only reference the catch up contributions because your public profile mentions grandchildren so I assumed you and your husband are over 50.
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Old 07-27-2016, 05:48 AM
 
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Quote:
Originally Posted by Bradmilano View Post
I only reference the catch up contributions because your public profile mentions grandchildren so I assumed you and your husband are over 50.
Right. The number is $24,000 for age 50+, not $18,000. That is the combined limit of contributions to 401(k) and Roth 401(k) plans. If hubby has kicked in $5K into a Roth 401(k) and $5K into a traditional 401(k), he still has $14K he can contribute with the new employer split however you want between traditional 401(k) and Roth 401(k).
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Old 07-27-2016, 10:56 AM
 
Location: Portal to the Pacific
5,119 posts, read 5,086,104 times
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Quote:
Originally Posted by Bradmilano View Post
I only reference the catch up contributions because your public profile mentions grandchildren so I assumed you and your husband are over 50.
The public profile isn't accurate.
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