Thread regarding Intel Corp. layoffs

Advice on how to minimize tax if you will be receiving severance payment

You should call HR and request that they max out your 401K and your HSA saving contribution for the the remaining pay checks that you will be receiving until your last day of employment. Of course this is assuming that you can afford to max out 401K and HSA contribution since you have enough emergency saving and the amount of severance payment.

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| 1570 views | | 6 replies (last May 5, 2016) | Reply
Post ID: @OP+HfyZhhC

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Yes, 401K contributions cannot be made from severance pay since it is not considered compensation pay. This is why you have to request HR to change the contribution amount for the remaining pay checks since you cannot do so on the severance check. As for contributing to Traditional IRA, you might want to check if your income including the severance payment will exceed the income limit for eligibility.

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Post ID: @ppz+HfyZhhC

Intel has lots of reqs on LinkedIn. What's going on

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Post ID: @tnt+HfyZhhC

Fairly sure that 401k contributions cannot be made from severance pay since it is not considered compensation pay, particularly too since the severance pay is made once you are no longer an employee. Plenty of web sites out there to check on this.

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Post ID: @jbc+HfyZhhC

You can also contribute another $5500 to a Traditional IRA to lower your tax, but like you said, don't want to put it in tax-deferred account if you are going to need it in the near term, because of the penalty you will have to pay to take it out.

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Post ID: @twm+HfyZhhC

Also remember if you're over 50, you can add $6,000 "catchup" on top of the $18,000 max.

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Post ID: @saj+HfyZhhC

Remember that the annual max contribution to 401K is $18K. You can request HR to change the percentage of your contribution to hit this max. HSA max amount depends on whether it's for individual or for family.

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Post ID: @zqa+HfyZhhC

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