I get this question quite a bit, how’s it work if I’m contributing to the Roth 401(k), but my employer makes their matching contribution?
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This information is for general financial education and is not intended to provide specific investment advice or recommendations. All investing and investment strategies involve risk including the potential loss of principal. Asset allocation & diversification do not ensure a profit or prevent a loss in a declining market. Past performance is not a guarantee of future results….(read more)
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Can Your Employer Match Directly Into Your Roth 401(k)?
When it comes to preparing for retirement, many people turn to their employers’ retirement savings plans for help. One popular option is the Roth 401(k), which offers tax-free withdrawals in retirement. But can your employer match directly into your Roth 401(k)?
The answer is: it depends. Some employers do offer the option to receive matching contributions directly into a Roth 401(k), while others may only offer matching contributions for a traditional pre-tax 401(k) account. It’s important to check with your employer’s benefits department to understand their specific matching contribution policies.
If your employer does offer the option to receive matching contributions into your Roth 401(k), it can be a valuable benefit. This means that not only are your own contributions to the Roth 401(k) growing tax-free, but also the matching contributions from your employer. This can add up to significant tax-free growth over time, helping you build a substantial retirement nest egg.
If your employer does not offer direct matching contributions into a Roth 401(k), don’t worry. You can still take advantage of the benefits of a Roth 401(k) by making your own contributions and enjoying tax-free growth on your investments. Additionally, you may have the option to roll over traditional 401(k) funds into a Roth 401(k) account, if your employer offers such a conversion option.
Overall, the key is to understand your employer’s matching contribution policies and the options available to you within your retirement savings plan. If you have the option to receive matching contributions into a Roth 401(k), it can be a powerful tool for building tax-free retirement savings. If not, you can still take advantage of the benefits of a Roth 401(k) through your own contributions and potential conversion options.
In conclusion, the ability to receive matching contributions directly into a Roth 401(k) will vary depending on your employer’s policies. It’s important to communicate with your employer’s benefits department and consider the available options for your retirement savings. Whether you have the option for direct matching contributions into your Roth 401(k) or not, it’s important to take advantage of the benefits of tax-free growth and carefully consider your retirement savings strategy.
So at retirement when we roll roth 401 k to Roth IRA we would have to pay tax on the employee match correct?
Is there a limit for amount to put in with a employer Roth401k like there is for getting a Roth through brokerage like vanguard or fidelity? Like 6500 for the year?
do you need to convert the company match to roth to be able to invest all your money available into a stock or fund?
Employer offers 401k pre-tax and Roth 401k which i can contribute to both. Plan allows "rollovers" by "source" from your investments. If I decide to "rollover" (not a conversion) just my Roth 401k which is a "source" for my investments to regular Roth IRA, what happens to employer match which you indicate was going to a"pre-tax" bucket. Do the "employer match" for Roth 401k also get rollover to a traditional IRA and my Roth 401k contribution goes to my Roth IRA? In addition, if I didn't already have a Roth IRA, if I open one to do a Roth 401k rollover does the 5 year rule start all over again? Would 5 year rule start if I rollover to existing Roth IRA? I am getting conflicting information on Roth 401k "rollovers" (not conversion)
Okay I understand that part….. So basically this is kin da like a bank account. With the Roth 401k account, what if this type bank has a crash, can they freeze or take some of your money if they run into trouble, like a bail in??
My fidelity account says my employer match applies to Employee deferral AND Roth Employee deferral. Are they matching both or one?
I will explain if anyone wants to know gladly
Because what's the today's new laws it's going to become non tax-deductible
Why a married couple with no children should never put money in a 401k
FINALLY! I now understand my employer Roth 401k! I'm 35 now & I start mine with my employer at 26. Now I now know to properly prepare for the contribution side of what my employer has contributed when I retire
I am contributing to a Roth 401k. I understand that all of my contributions are made after taxes have been paid. So when I withdraw the money I will not have to pay any taxes on my contributions andon the earnings. I get a company match every time I contribute to the Roth 401K. Why can't they or wont tax the company match? Thanks
You mention that you wish IRA’s would let you co-mingle Roth and Traditional assets. But, at least in my 401k, you have to access money pro rata. This would surely screw up IRA withdrawal strategies!
I would like to "hear" your solo education videos like this one on your podcast platform too. Great content.
How do 401k firms track all the various sub accounts and the growth on investments? For instance I have my pretax $ , my employer contribution $, and my Roth $. All of which have their basis and growth. Must be complex maybe fodder for another video???
Great video, thank you!