Does your 401k have a provision that allows you to superfund the account? If so, you can add up to an additional $43,500 of after-tax contributions, which is separate from the $22,500 employee deferral. (Don’t forget to subtract your employee contribution!) Then, if you convert it to a Roth, you won’t pay a dime of taxes on those earnings.

Sound illegal, but it isn’t! Just listen to all the benefits that will save you money!

Del Monte Group has been in business for over 35 years, cultivating relationships and building a family of lifelong clients just like you. If you need help navigating life challenges, are seeking smart, resourceful planning, or just want to find confidence and peace of mind, get in touch. We’re always here to help at 925.736.6410, Richard@APlaceOfPossibility.com, or Angela at Angela@APlaceOfPossibility.com.

YOU’RE INVESTED, AND SO ARE WE™. If you’re looking for out-of-the-box financial wellness support that offers long-term success even while navigating life transitions and challenges, we’ve got your back. Get started by scheduling a 30-minute session with Richard or Angela today

FREE INVESTMENT ANSWER E-BOOK Team DMG loves a good book, and that’s why we’re excited for the opportunity to present you with a FREE copy of the “Investment Answer” because we know it will change the way you look at investing for good. No, we didn’t write this book, but we believe it is a fantastic tool that every investor should have in his or her arsenal. Download your e-book here

DID YOU KNOW? When Wealth Is Transferred from One Generation to the Next, 70% of the time, That Generation Loses the Wealth by the End of Their Lifetime? How does all of this happen? Lack of connection, communication, and preparation. Don’t let this happen to your family. Get your FREE copy of Richard’s book: Endless Inheritance, and learn how to ensure your wealth will live on

ARE YOU READY TO BECOME A BETTER INVESTOR? We’ve got you covered! Download a free copy of our e-book, Evidence-Based Investment Insights, and discover proven principles to help you maximize your financial growth

Looking for speakers who can help navigate life transitions or help build a secure income plan for the next chapter in life? Richard Del Monte and Angela Wright have spoken at dozens of organizations in the greater Danville area and love to contribute valuable information. If you need customized wealth management insights broken down into simple, engaging content specifically for your group, get in touch today.

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LEARN MORE ABOUT: IRA Accounts

CONVERT IRA TO GOLD: Gold IRA Account

CONVERT IRA TO SILVER: Silver IRA Account

REVEALED: Best Gold Backed IRA

You Can Put Up to $66,000 into Your Employer-Sponsored 401k. Here’s How.

Saving for retirement is crucial, and one of the most popular ways to do so is through employer-sponsored 401k plans. These plans offer many advantages, including tax benefits and the opportunity to grow your nest egg over time. However, many employees are unaware of the maximum contributions they can make to their 401k.

In 2022, the Internal Revenue Service (IRS) has set the contribution limits for 401k plans at $20,500 for individuals under 50 years old. But did you know that those aged 50 and over can make additional catch-up contributions? This means that if you are 50 or older, you can contribute an extra $6,500 to your 401k on top of the regular contribution limit, bringing it to $27,000.

However, the contribution limits don’t end there. If you have a high salary and want to save even more for retirement, you may be eligible to contribute to an after-tax 401k account, also known as a Roth 401k. The after-tax contributions you make to a Roth 401k are not tax-deductible, but the earnings from these contributions grow tax-free. The IRS allows a combined contribution limit for both the traditional and Roth 401k accounts, which is capped at $58,000 in 2022 for individuals under 50.

But here’s where it gets even more interesting. If your employer allows it, you can make additional after-tax contributions to your 401k above the $58,000 limit. These contributions are known as “mega backdoor” contributions. The IRS allows a total combined contribution limit, including all employee and employer contributions, of $61,000 for individuals under 50. However, if you are over 50 years old and making catch-up contributions, this limit increases to $66,000.

Mega backdoor contributions can be a game-changer for those looking to turbocharge their retirement savings. By maxing out their contributions, individuals can take advantage of compounding returns and potentially achieve a more comfortable retirement.

To make mega backdoor contributions, you need to check if your employer allows after-tax 401k contributions and in-service withdrawals. In-service withdrawals allow you to move the after-tax contributions to a Roth IRA while still employed. If your employer permits these options, you can contribute above the regular limits and then transfer the additional contributions into a Roth IRA, where they can grow tax-free.

Keep in mind that mega backdoor contributions require careful planning and attention to tax regulations. Speaking with a financial advisor or tax professional is highly recommended to ensure you’re following the correct procedures and taking full advantage of the opportunities available to you.

In conclusion, taking advantage of the full contribution limits of your employer-sponsored 401k can significantly boost your retirement savings. By making catch-up contributions, utilizing after-tax 401k contributions (Roth 401k) and potential mega backdoor contributions, you can contribute up to $66,000 annually, allowing for substantial growth in your retirement accounts. Remember to consult professionals to optimize your strategy and secure a prosperous retirement.