Anyone else bummed the 401K limit in 2008 didn't change?

[svt2nv04]

i thought that was just for a roth ira?

[Niko]

Quote:

Originally Posted by svt2nv04 i thought that was just for a roth ira?

If that's true (I really don't know) then rollover to a roth.

Most folks here also have other, non tax advantaged, accounts to draw on.

[svt2nv04]

Quote:

Originally Posted by Niko If that's true (I really don't know) then rollover to a roth. Most folks here also have other, non tax advantaged, accounts to draw on.

yeah that's true about the rollover. are there any disadvantages to doing so? I'm surprised the IRS hasn't made it a rule that we're not allowed to do that. I guess you get taxed when you roll it over. There isn't a penalty is there?

[Niko]

Quote:

Originally Posted by svt2nv04 yeah that's true about the rollover. are there any disadvantages to doing so? I'm surprised the IRS hasn't made it a rule that we're not allowed to do that. I guess you get taxed when you roll it over. There isn't a penalty is there?

I've never done a roll over so you might wait for a more informed response. But the main disadvantage, as I understand it, is the need to pay a potentially big tax bill when you roll over. As such, it makes sense to plan your roll over a couple of years in advance to ensure you can pay the taxes.

[growing_older]

Or spread it out over several years. Rollover just enough each year to stay in lower brackets.

[Niko]

Quote:

Originally Posted by growing_older Or spread it out over several years. Rollover just enough each year to stay in lower brackets.

Good point.

[Sarah in SC]

Ninja, I don't know about the costs relative to other kinds of 401ks, but the Safe harbor is practically the only way that the HCEs and executives of a company can put the full amount in the plan and not run afoul of one or more of the tests.

We have a safe harbor plan that we run for just a handful of clients, but the admin is done by a TPA firm.