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One Item, If you get a match, Make sure you don't Hit the Max before you retire. In most plans once you hit the Max, your Contribution stops, and the company/organization match stops. So you need to calculate it do on the last paycheck of earned income, everything get matched.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by flyonpa
One Item, If you get a match, Make sure you don't Hit the Max (401k contribution) before you retire. In most plans once you hit the Max, your Contribution stops, and the company/organization match stops. So you need to calculate it do on the last paycheck of earned income, everything get matched.
Our's and most companies contribute up to a % of employee income (Usually 4%-6%, of annual salary)
so... if you are dumping in 4%, they match 5%(of base salary), if you are dumping in 50%, they still only match 5% (UP TO of annual base salary). Some plans may only match 5% based on equal contributions. Rules vary to make employer happy. Most recent change was when my previous company will match ONLY on Jan 15 of yr FOLLOWING your contributions, if you happen to still be employed...
Do check on the plan, as I would tend to delay contributions till :
1) markets are cheap
2) final $24k of income, then do 100% contribution
I also used Section 179 (accelerated depreciation) for future 'Business expenses' during Severance payout year. Be sure to follow the rules... essentially I bought assets I could use, but were not apt to depreciate on resale value. I sold and recaptured the depreciation in a LOW income yr (You will have plenty of those years in the future)
It sounds too complicated. I just meant they didn't take out 401k contribution on his last paycheck for vacation pay. My corporation didn't take out any 401k for my 26 weeks severance pay either.
It sounds too complicated. I just meant they didn't take out 401k contribution on his last paycheck for vacation pay. My corporation didn't take out any 401k for my 26 weeks severance pay either.
Not sure if you meant my comment. I retired January 1 and had made my contributions for the previous year and since my final pay and unused vacation days payout occurred after my January 1 retirement I was able to make that years contribution in one lump sum. It was set up with payroll and the benefits office.
Not sure if you meant my comment. I retired January 1 and had made my contributions for the previous year and since my final pay and unused vacation days payout occurred after my January 1 retirement I was able to make that years contribution in one lump sum. It was set up with payroll and the benefits office.
I need to check my husband's last paycheck. I recall he couldn't contribute from his vacation pay out.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,705 posts, read 58,022,681 times
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Quote:
Originally Posted by NewbieHere
I need to check my husband's last paycheck. I recall he couldn't contribute from his vacation pay out.
You (as employee) cannot choose to designate your non-wage income to 401K / tax deferred, however, your company can choose to designate 'retirement incentive' to a qualified acct (tho unlikely they will). Ours did it ONCE in about 1993, but they abandoned that practice.
My section 179's were only to offset 'year-end' IRS obligations, as per the post I responded too.
'Conventional' retirees (never intend to have a business / earned income in future) are likely not interested. I was not interested in giving 40% of my severance to IRS (24 months pay + 18 weeks earned vacation)
My corporation didn't take out any 401k for my 26 weeks severance pay either.
I leave my company March first, and it will max out my 401K from my severance.
I asked payroll or benefits (I forget which) if they could do it, and they said yes, just let them know by about 4 weeks ahead of time.
All I had to do was ask.
So what about a Roth IRA? If I retire in June, can I keep contributing from June - December (this isn't out of your paycheck). Or do I need to contribute the whole $6500 while I am still working? I figure it's ok since you can retroactively contribute, but I'm not sure.
I believe that for the year you just had to have earned income (of more than your contributed amount). Doesn't matter that you only worked X number of months.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,705 posts, read 58,022,681 times
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Quote:
Originally Posted by SouthernSusana
So what about a Roth IRA? If I retire in June, can I keep contributing from June - December (this isn't out of your paycheck). Or do I need to contribute the whole $6500 while I am still working? I figure it's ok since you can retroactively contribute, but I'm not sure.
You can contribute to your ROTH up THROUGH tax filing deadline of any yr you had earned income.
I.e.... You work through June 2017, you can contribute to IRA through 15 April 2018. (I suggest you don't wait till last minute... tho many do)
In the future... if you have a PT job or any earned income, you can still contribute to your IRA (Roth or Traditional)
I have been retired 10 yrs and use both every yr, depending on my tax situation.
You can also roll and re-characterize within rules. (even multiple times per yr!)
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