New 401K Rules You Need to Know in 2025
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- Опубликовано: 4 июл 2024
- The catch-up contribution limit will change starting in January 2025, and there will be an income limit to contribute to Traditional 401K starting in January 2026.
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@FirePsyChat what about company matching I’m thinking more like a solo 401(k) business portion still invest in a traditional 401(k) portion?
Great educational video. These changes emphasize the importance of starting to invest early, and using a tax control triangle.
Thanks for sharing. Do you know if the TSP allows us to do a back door Roth conversion?
It does not
You would have to move your money out to a regular IRA and do the conversion from there
Is that 145,000 AGI or before taxes??
Is it line 1 on w2?
Roth accounts are RMD exempt, as you already paid taxes. Why wouldn't you maximize Roth contributions unless pre-tax contributions can lower your federal / state tax bracket. This is why a good financial planner / investor and tax preparation will save you $$ over the years and lower your tax obligations.
@@johnharbaugh9471 because maybe someone’s current taxes are significantly higher today than they will be in retirement.
Thanks for the video. Would you know how this would work if they remove the backdoor Roth IRA like you mentioned in previous videos?
SECURE Act 2.0 did not mention anything about the Backdoor Roth IRA. Pres Biden proposed to remove the backdoor Roth IRA, but we'll see what happens. They've tried to repeal the Backdoor Roth IRA repeatedly in the past.
Great video! Over 50 but below 60 years old. If my employer offers both trad and Roth 401k, can I put the maximum in the trad 401k then put the catch up in the Roth 401k (plan allows mix and match) for 2025 and 2026,
I was wondering if you could make a video about a question I have. I work for a company that has approved ending the company pension and I’m wondering what to do with that money when they decide how to give it to us, thanks
You roll it into a self directed IRA and buy some good S&P ETFs and forget about it. Easy as can be, and you dont need a planner, just do some research of all the awesome ETF out there. Start reading Seeking Alpha if you have no idea what Im talking about. Open an account with Fidelity or Vanguard and start reading.
Contact each of the 3 big investment firms
Vanguard, Fidelity and Schwab.
1. Ask for an investment Representative and they will walk you through the options.
2. That way you can compare notes.
3. But please invest ALL the money (a total stock market index is a very safe investment choice).
4. Learn to use an investment calculator to project the growth of your investment
5. Start reading all the bestselling books on investing. Self Education is very powerful.
@@Dividendflywheel thank u for the answer believe me I know I’m 34 and started just a few else ago so unfortunately I was not fortunate enough to get the pension but I have several coworkers who have been their over 15 yrs with no idea what to do so I’m trying to help them.
To clarify, the income limit for catch up contributions is for "earnings" only. If you earn $80K at your employment, but have non earned income that brings you above that income limit, you will still be able to contribute catch up to non roth workplace plans.
Yup!
Which line on 1040 or on w2 is this amount of 145k?
Is this adjusted or just your gross income?
Gross earnings unfortunately. if your wages are higher than $145,000, any catch-up contributions you make will have to be done after taxes to a designated Roth account, which means you won't get a tax deduction.
@@FIREPsyChat that's what I figured, but just wanted to clarify. Thanks
Great educational video. These changes emphasize the importance of starting to invest early, and using a tax control triangle.
FJB but anyway I have decided to do 100% Roth anyways since I am closer to FIRE at age 53..Wage discrimination
Thanks Joe Biden!
@@shawnm7614 uhm this was in play before trump or Biden ….it was finally proposed and implemented by trump and the second version was bipartisan agreement The House bill, known as the Securing a Strong Retirement Act of 2021 (H.R.2954), was introduced and passed with a bipartisan vote of 414-5. On the Senate side, six Republicans and five Democrats were co-sponsors of S. 1770, the SECURE 2.0 Act. I’m an independent and I hate seeing misinformation on both sides. This bad law was signed by Biden but we both know does he even remember signing it or even what it’s about. In the end of the day, it’s both houses that are more responsible than the president putting his John Hancock, we need to vote them all out. If we continue to vote the opposite party for every election until they get it, they would lose all the power and start actually working for the American people, but I digress.
All true but I am sure he is referring to Biden being out last line of defense and he didn’t come through. @@X.MillennialResponder.X