I am replicating the thread below and changing 100K to 200K
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American employees are paid far far too much...
Is this for US payroll? Assuming pre-tax and inclusive of bonuses/AWB?
@1ugf. Great explanation, i do the same thing, until your last comment. Putting it in the cash account to Avoid paying taxes is like forgoing your paycheck because you dont want to pay taxes. If there are taxes to be paid is because the money grew; and the gains are more than the tax you will pay.
Yes that's an option. Max out pre-tax to 19500. Then I usually keep contributing the remainder into after tax cash account only. At the end of the year I convert that after tax cash account into a Roth conversion , then distribute into my preferred investment vehicles. I choose to put the after tax dollars into the cash account just to avoid taxes prior to the Roth conversion.
Y’all are getting paid?
@qbw+1dwNUHFr my advice to you is to get the full 19,500 in pretax and put the remainder of the 20pct in the Roth 401 k. There is a max per the irs that you can you can put in a 401k (pretax plus after tax). If you can afford to save that max, do it. Congress is going to close this eventually, but you can also put 6000 after tax ( check the current year max) in a traditional Ira and back door convert it to a Roth to grow tax free in the future. Save big early and continuously. You won’t miss the money
Do these things every year you are with an employer that has such an option. M
I’ve done these things for 20 years and my 401k just hit 2.5M. Not fu money yet but close enough to get me to my fu mark soon
Great question and good luck
Can anyone give me advice for someone who is 2 years into his career? Im hitting the 19.5k pretax contribution....do I simply leave the 20% into after-tax until the new year starts? Its hard to have conversations at work about it because not many people do it. Is the backdoor for those who are in their last few years of employment?
I turned it down when it came the time.
I believe in a maximum wage of $45/hour.
And a minimum wage of $45/hour.
But that's just me.
It felt like I'd just passed my 10 millionth troll entry on the Layoff Board!!
It felt great in other words.
We have hot water now.
Was so long ago that I forgot.
@duu nails the math 100%
@wzf+1dwNUHFr You would have seen them growing faster if you had not paid your mortgage considering the mortgage rates in the past 5 years, Some people here put in evidence why they are laid off….
I passed the $300K mark a few years ago.
But well before that, I had already managed to fully redeem my mortgage on the house.
How did I feel, on crossing the $300K mark?
Well not much, really - except for attaining a lightness of being, on seeing my cash savings accumulating faster in my bank account
It's just a number, it really did not matter to me.