See updated limits and understand how the different contributions work with limits.
For 2024, you can now contribute up to $23,000 out of your pay (as “salary deferral”), and the total plan limit is $69,000. The catch-up contribution for those age 50 and over is unchanged. Other developments include Roth matching and other employer contributions coming in as Roth-type money.
It’s important to understand the various ways you can add money to a 401(k) plan and how employer contributions fit into the mix. Much of this information applies to other workplace plans as well, including the TSP, 403(b) plans, and many 457 plans.
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If you’re trying to max out your 401(k), you may need to contact your employer’s Payroll or Benefits department. And if you’re self-employed, you may need to make adjustments-and you might want to look into plans that allow mega backdoor Roth contributions.
MORE RESOURCES:
How the 401(k) max works: www.approachfp.com/how-the-40...
Roth employer contributions? www.asppa.org/news/secure-20%...
Roth vs. Traditional (Which Is Best?): • Roth 401k vs Tradition...
Along with all of that, we’ll cover some frequently asked questions about saving money in a 401(k) plan.
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CHAPTERS:
00:00 Preview
01:23 Types of Contributions
03:43 More on Employee Contributions
05:04 2024 Update
09:07 Mega Backdoor Roth
12:44 FAQs on 401(k)
Justin Pritchard, CFP® is a fee-only fiduciary advisor who can work with clients in Colorado and most other states.
IMPORTANT:
Check with your employer, plan administrator, and 401(k) vendors before making any decisions. It's impossible to cover everything you need to know in a video like this. The only thing that's certain is that you need more information than this. Always consult with a CPA before making decisions or filing a tax return. This is general information and entertainment, and is not created with any knowledge of your circumstances. As a result, you need to speak with your own tax, legal, and financial professional who is familiar with your details. This video is not a substitute for individualized, personal advice. Please verify with your plan administrator when employer plans are involved. This information may have errors or omissions, may be outdated, or may not be applicable to your situation. Investments are not bank guaranteed and may lose money. Opinions expressed are as of the date of the recording and are subject to change. “Likes” should not be considered a positive reflection of the investment advisory services offered by Approach Financial, Inc. The Comments section contains opinions that are not the opinions of Approach Financial, Inc., and you should view all comments with skepticism. Approach Financial, Inc. is registered as an investment adviser in the state of Colorado and is licensed to do business in any state where registered or otherwise exempt from registration.