Delawaredave5
Full time employment: Posting here.
- Joined
- Dec 22, 2004
- Messages
- 699
Megacorp offers 100% matching up to 6% of pay. Employee contributions can be to Pre-tax 401k, Post-tax 401k, or Roth 401k (just added last year).
Believe I read somewhere that there's "something funky" about company matching contributions - that these contributions can only be to aftertax 401k account ?
I can't fully understand example at this website:
Roth 401(k) Information - Case Studies
If I read this right, a person making 100k in 28% tax bracket, with a 1 to 1 match up to 6%:
1. If contributes to "regular" 401k $6k --> company matches $6k
2. If contributes to Roth 401k $6k --> the "equivalent after tax Roth contribution" is $6k - (0.28 * $6k) = $4320. And that's what the company matches ?
So in the second case the company's matching contribution is reduced by $1,680 ?
So complicated.....
Believe I read somewhere that there's "something funky" about company matching contributions - that these contributions can only be to aftertax 401k account ?
I can't fully understand example at this website:
Roth 401(k) Information - Case Studies
If I read this right, a person making 100k in 28% tax bracket, with a 1 to 1 match up to 6%:
1. If contributes to "regular" 401k $6k --> company matches $6k
2. If contributes to Roth 401k $6k --> the "equivalent after tax Roth contribution" is $6k - (0.28 * $6k) = $4320. And that's what the company matches ?
So in the second case the company's matching contribution is reduced by $1,680 ?
So complicated.....