<BreadWithSpam@[EMAIL PROTECTED]
> wrote in message
news:yob4p98hqkr.fsf@[EMAIL PROTECTED]
> Bill Woessner <woessner@[EMAIL PROTECTED]
> writes:
>
>
> (And not everyone can put the legal max into retirement accounts -
> even if one can put the full $15.5k into a 401k *and* maxes out
> an IRA (Roth or Trad), that's still only $20.5k
$15.5K is not the legal max that can be put into a 401K. I see this
mistakenly stated in many places.
That is the max that can be put in Pre-tax.
The total limit for 2008 is $46K combined Employee/Employer.
This year, I will put in $23K, my generous employer matches with $23K,
total
of $46K goes in to 401K.
The amount above the Pre-tax limit of $15.5K is taxed, but grows tax
deferred, kind of like contributing to a non-deductible Traditional IRA,
plus i get the 100% match.
While this is good to capture all the free money, it can lead to imbalance
in the Retirement vs. Non-Retirement savings. Particularly if you plan to
retire early, but can not touch the over-weighted "retirement" saving.
There is Rule 72t, but that is a discussion for another day.
As an aside, every year i get a piece of these contributions (both mine
and
employer match) paid back to me out of the 401K because we fail the
"fairness" test for HCEs. I am always amazed that people do not take
advantage of 100% matching on 10% of income. It is like saying "No
Thanks"
to a 10% raise!
I have jokingly advocated identifying those that do not max out enough to
get all the matching, and firing them for excersizing such poor judgement.
If they are making such bad financial decisions in their own lives, what
kind of decisions are they making regarding company matters?
Best regards,
Marco Polo
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