Strategies to make the most out of your Microsoft employee benefits.

Maximize your MICROSOFT 401(k) by utilizing the Backdoor Roth provision. The Mega Backdoor Roth allows you to invest beyond the traditional 401(k) limits. Contribute after-tax dollars and convert those dollars to Roth. Grow your savings for retirement — tax-free.

Video takeaways:

2024 401(k) contribution limits:
— Under 50 years old: $23,000
— 50 or older: $30,500

MICROSOFT Employer Match
— Microsoft will match 50% of your contribution – up to $11,500.

The MICROSOFT Mega Backdoor Roth 2024 TOTAL 401(k) contribution limits:
— Under 50 years old: $69,000
— 50 or older: $76,500

Use the Mega Backdoor Roth to contribute after-tax dollars – over and above the traditional 2024 contribution limits. MICROSOFT allows you to contribute up to the Federal limit – this means you can contribute up to $34,500 to a Roth this year!

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⏲️Timestamps

00:00 Introduction
00:14 401k Contribution Considerations
00:49 2024 401k Contribution Limits
01:10 2024 401k Paycheck Contribution Limit (under 50)
01:27 Microsoft Employer Match
01:39 Microsoft Mega Backdoor Roth
02:12 2024 401k Contribution Limit (50 or older)
03:02 Microsoft 401k Benefits

RESOURCES FOR MICROSOFT EMPLOYEES

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👥 Connect with Aaren Strand, CFP® linkedin.com/in/aaren-strand
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We focus on providing comprehensive financial planning and investment advisory strategies for tech professionals and their families.

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Third Party: Avier Wealth Advisors is not affiliated with Microsoft. There is no guarantee that the information we have provided is accurate. Microsoft employees are encouraged to contact their employer should they have any questions regarding their employee benefits.

Taxes: Avier Wealth Advisors does not prepare taxes. The tax ideas presented are meant to demonstrate general concepts rather than precise calculations. We consult with your tax professional for exact calculations….(read more)

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Saving for retirement is an important financial goal for many individuals. In 2024, Microsoft employees have a unique opportunity to maximize their retirement savings through the company’s 401(k) plan and a lesser-known strategy called the Mega Backdoor Roth.

Microsoft’s 401(k) plan offers employees a way to save for retirement through pre-tax contributions, which can grow tax-deferred until retirement. In addition to the standard 401(k) contributions, Microsoft employees can take advantage of the Mega Backdoor Roth strategy to save even more towards retirement.

The Mega Backdoor Roth allows employees to contribute after-tax dollars to their 401(k) plan and then convert those contributions to a Roth IRA. This strategy can be particularly beneficial for high earners who may be limited by the contribution limits of a traditional Roth IRA.

By utilizing the Mega Backdoor Roth, Microsoft employees have the potential to save thousands of dollars towards their retirement goals. Contributions to a Roth IRA grow tax-free and qualified distributions in retirement are also tax-free, providing valuable benefits in retirement.

To take advantage of the Mega Backdoor Roth, employees must first max out their annual contributions to the traditional 401(k) plan, which for 2024 is $20,500 for individuals under 50 and $27,000 for those 50 and older. Once the traditional 401(k) contribution limit has been reached, employees can then contribute after-tax dollars to the plan, with a maximum combined contribution limit of $58,000 for individuals under 50 and $64,500 for those 50 and older.

After making after-tax contributions to the 401(k) plan, employees can then convert these contributions to a Roth IRA, where they can continue to grow tax-free. This strategy allows employees to take advantage of the benefits of a Roth IRA, including tax-free growth and distributions in retirement.

For Microsoft employees, the Mega Backdoor Roth can be a powerful tool in saving towards retirement. By maximizing contributions to the 401(k) plan and utilizing the Mega Backdoor Roth, employees have the potential to significantly boost their retirement savings and create a more secure financial future.

As with any financial strategy, it’s important for employees to consult with a financial advisor or tax professional to ensure they are maximizing the benefits of the Mega Backdoor Roth while also considering their individual financial situation and goals.

In conclusion, the 2024 Microsoft 401(k) plan, combined with the Mega Backdoor Roth strategy, provides a valuable opportunity for employees to save thousands of dollars towards their retirement. By taking advantage of these retirement savings tools, employees can maximize their retirement savings and create a more secure financial future.