Final year...401k strategy

[Koolau]

I kept maxing out till the end. Took advantage of my employers 12% match.

Yeah, no matter what, you gotta do the match. After that, there are tax and other issues to consider for the future.

 

[Alex The Great]

The new rule seems to be that unless a Roth option is offered, nobody can make catch-up contributions, including those under the limit.

It seems Fidelity link indeed does not make it clear. I do have another link which explain this part:
https://finance.yahoo.com/news/earn-over-145k-may-pay-100024185.html
The first thing to note is that Section 603 does not phase in. Individuals who earn $144,999 or less are exempt. They may fully deduct the income that they contribute to an employer-sponsored retirement account, including any catch-up contributions.

 

[tulak]

A two year reprieve from the IRS on pre-tax catch-up contributions:

The IRS has also provided a two-year administrative transition period to effectuate these changes. According to the IRS, the extra time "is designed to facilitate an orderly transition for compliance with that requirement."

In simple terms, the guidance and the transition period mean that plans can continue to allow pre-tax catch-up contributions by highly paid participants, and plans that do not have a Roth option can continue to allow catch-up contributions through December 31, 2025.

I read this in a Forbes article on Apple News.

 

[Humbooster]

I had what the "experts" would say was too much cash in hand. At the start of my last year, I chose to max out my contribution immediately so that I was then free to go at any moment after that. I made it all the way to September...

 

[DrRoy]

Do you need unsheltered cash?

 

[LateToFIRE]

...starting next year, pre-tax catch up contributions into regular 401K are not allowed for those with income exceeding $145K annually. Instead, they will come after tax into Roth 401K which is not good especially for those with higher income.

First I'm hearing of this. Very disappointing...

Same here. Wow, the pitchforks & torches cometh for thee.

To the question at hand, I'm in a very high income tax bracket, so rather than give away half those dollars to Uncle Sam (and his state/local relatives), I've been putting in the max + catch-up into pre-tax 401K consistent with my set it and forget it approach for past 30 years. If I stopped contributing every time I though I was fed up enough to make the jump, would have halted contributions 10 years ago (and that would not have been a very smart idea). I have however halted after-tax IRA contributions - just felt like a why complicate life any further kinda thing.

 

[LateToFIRE]

I had what the "experts" would say was too much cash in hand. At the start of my last year, I chose to max out my contribution immediately so that I was then free to go at any moment after that. I made it all the way to September...

Hmm... that's some food for thought.