I am trying to set my retirement date for either end of 2011 or early 2012. The limits for 2012 will be at least $16500 plus $5500 catch up. I know the catch up can be done in any amount you can manage. In 2011 I did $1000 a paycheck and 7% in order to maximize employer contribution. So catch up was paid by mid March. (bi-weekly pay schedule). And 7% lasted most of year to reach maximum.
Now I have not done the math, but is it possible to say do the contribution at 75% and the catch up at $2000, and set retirement date at mid February? I know I have to pay FICA and Medicare, but then use 100% of remainder to get 401K maxed out then retire. So almost all of 2012 income is tax deferred. I know I can start SS and work at the same time and this way SS will have minimal tax as W2 will be close to zero. I realize I miss matching $, but at least get maximum deferred.
Anyone know if this will work?
Now I have not done the math, but is it possible to say do the contribution at 75% and the catch up at $2000, and set retirement date at mid February? I know I have to pay FICA and Medicare, but then use 100% of remainder to get 401K maxed out then retire. So almost all of 2012 income is tax deferred. I know I can start SS and work at the same time and this way SS will have minimal tax as W2 will be close to zero. I realize I miss matching $, but at least get maximum deferred.
Anyone know if this will work?