{ "media_type": "text", "post_content": "I maxed out the pretax limit (19k) on my 401k and then started investing in my brokerage account. 140 annual base salary. Am I doing it wrong? Should I look into this Backdoor IRA thing ?", "post_id": "5e8a069f4779a6002fa32418", "reply_count": 22, "vote_count": 1, "bowl_id": "59064a3cb12379001006592c", "bowl_name": "Personal Investment Chatter" }

I maxed out the pretax limit (19k) on my 401k and then started investing in my brokerage account. 140 annual base salary. Am I doing it wrong? Should I look into this Backdoor IRA thing ?

like
Posting as :
works at
You are currently posting as works at

It depends on your timeline. I'm quite surprised many in this bowl adviced to max out 401k contributions. My take: 1. Maximize 401k to the point your employer matches it (advertising agencies is usually up to 6%. 19% would be a waste) 2. 401k isn't accessible till retirement. It's not more tax efficient, not always. It is if you assume your annual income after retirement is less than your income today. It is taxable upon withdrawal, and your tax bracket depends on your income at that point of time. 3. IMO, take that surplus amount from your contributions and put it into a brokerage. Roboadvisor brokerages like Charles Schwab is a good place to start : it will invest in diversified ETFs for you, based on a personality test. 4. Take a small % of that amount and gamble. So you have your 401 nest egg, your diversified portfolio, now you can gamble in a get-rich-quick way. And by this I mean buying a single stock like MSFT if that rocks your boat. Maybe you think gaming will soar with people indoors, so maybe you buy Activision? Other more risky ways would be playing with options or cryptocurrency. Go crazy here, whatever your body tells you to do. You have to feel good about it. I did crypto once, lost sleep on it, so that's how I know it isn't for me.

likehelpful

But haven’t the property tax deduction and mortgage interest deduction essentially gone away with the new tax code — which allows a maximum deduction of 10K?

PwC lets you contribute about $50k per year into your 401k. After the 19k pre tax, everything else is post tax. From there, you can roll over your post tax contributions into a Roth IRA even if you aren't eligible to contribute to one normally because your salary is too high. This is the back door Roth. I started doing this last year at the advice of my PwC Envision Financial Advisor. It really just depends on what your strategy is, do you want access to this money and liquidity of a personal brokerage or do you want to not touch it until you're 65? The good thing is you've already paid tax on Roth contributions so you won't have to pay tax when you withdraw them.

likehelpful

Yes. It is a fantastic benefit that is not advertised well enough!

You should be doing a Roth IRA backdoor in years you pay the AMT. You should calculate your effective tax rate without AMT and your AMT tax amount. Based on the difference, you can do a backdoor Roth IRA because you would have already been taxed for AMT which is higher than MAGI effective tax rate. If that’s confusing, get a good accountant to help you through it.

like

Also, roth IRA isn't always the better option. If you assume you will have less income in retirement than today, Roth IRA is making you pay more taxes because you're in a higher income bracket today.

To my knowledge, based on income in that particular year.

like

Related Posts

Life / Career Advice: I applied to medical school since my MCAT score was set to expire, ended up getting into 1 program. I also have an opp to join a well funded/well established Healthtech Startup (6 figure salary w/ equity + benefits) as a BD professional. I enjoy the business side of things and am unsure if I would end up practicing Medicine (medicine is also a long arduous path). At the same time, having an MD holds a lot of clout/authority in HC. Any thoughts on what I should do?

like

Any Big 4 or MBB Healthcare (Provider) folks here?

like

I have an opportunity to take over the 401k at my credit union and was thinking about getting this as it seems like it could be done pretty quickly and may pay dividends in the future.

like

Finally 25 years young and think I'm about ready to retire this year

like

Hey Fb friends - need an advise. My current firm hasn’t stated my GC process yet and with current processing time it appears to be somewhere around 12-15 months time to get PERM approved. In addition my current firm needs leadership approval & they make me sign a reimbursement form in case I quit. On other hand, I have approved i40 from my ex-employer (Big4) who fired me last fall, I don’t know if they will hire me back. Since I am from India and the date of filing appears like going to be…cont.

like

401K Question - Very Confused. Just came to US and will be here for about 4 Years. Firm matches 25% of first 6% employee down. Some say, upon withdrawal, have to 40% tax/penalty / others say .. Contin

like

Anyone else? I have a full set up (multiple monitors, standing desk, the whole nine) in my home office, but as often as I can (like when I have a webinar or training to watch) I like to sit on the couch with just the laptop and get the full benefits of puppy snuggles 🥰🥰

Post Photo
like

Looking at 401k. Some funds are -10%+ YTD, others are -1% YTD. Does that mean there is more upside to the -10%+ YTD funds? I'm staying away from energy ones, but looking at VEIRX, -17% for the year

like

Best books about product management for a good exit to industry? I already have an MBA and PMP but looking for a refreshed perspective since it’s been years since my formal education. Currently reading “Product Managements Sacred Seven” but it’s geared toward the startup world. I am in healthcare and not looking for a startup role. TIA!!!

like

Q for consultant moms. How did you navigate your career post maternity leave/after the 1 year local project limit? Are projects more flexible with travel for mothers? Can any traveling moms comment?

I'm sorry if this is out of place, but is anyone interested in coming on my veteran podcast? I work for a Nonprofit Organization that provides supportive services to veterans in CA, NV and AZ and our podcast discusses issues relevant to veterans. I'm organically searching for veterans who are willing to talk about their experiences, mental health and healthcare, employment, case management, housing for the homeless, etc. We don't require you to be an expert on anything.

like

Looking for some advice. Currently contributing 10% to 401k and maxing out Roth IRA, and remainder of savings (usually $800-$1200 per month) putting in a HYSA for a down payment on a house. Hoping to buy in 2-3 years once we (partner & I) have a sizable down payment. Should I continue to put all my non-retirement savings in an HYSA for a downpayment or should I also contribute to my brokerage and invest to grow wealth? (24yo, $85k)

like

Feeling like my firm has a very outdated parental leave policy (and none of the women partners have children)! What is the parental leave policy at your firm? Please include: (1) size of firm; (2) location of firm (city, state); (3) how many paid weeks off from firm (not state/fed benefits); (4) other policies such as ramp up/down time, etc.

like

Should I stop depositing into my 401k?

like

What generally produces better returns - 401k invested in index, or landlords with leverage?

like

My mom is going through a very bad situation with her previous employer who is not paying her her correct retirement benefits after screwing up their paperwork. She worked for a school district for about 15 years. She has a case but she is afraid it’s not high value enough to attract the attention of the attorney. School district is now ghosting her. If anyone has advice or interest, please let me know, thanks so much

like

Any recommended resources for learning RPA/Automation for healthcare?

like

Between my wife and me our family has about $5M. Is that enough to retire in India?

likefunny

I’m paying $1600 a mos for my benefits and that’s with a $9k family deductible. Is that what you are paying too?

like

Hoping to get my PHR in the next year or so. Outside of employer reimbursement, are there other opportunities for this to get funded? I know SHRM Foundation offers scholarships for the CP, but I am looking for PHR specific help. Thank you! :)

Additional Posts

Catching up on GOT. Work from home perks 👍🏼

like

3 months into WFH and I (and my admin) are all of the sudden making mistakes like never before. Nothing minor, but definitely not on our usual game. I think it is due to the lack of ability to talk with partners and staff in person and sync up. Anyone else experiencing this?

like

Please be kind, genuinely looking for help. Started my Grad School journey and really want an idea of the quality of school I can realistically aim for. My profile: M / 27 / AA 3.1 GPA Frm a State university 6 YOE (3 in Big 4 Consulting) Active in community Prez of a few orgs Frm Chicago 100% open to relocate 1st practice GRE: 304 (151- V / 153 Q) Looking to pursue a tech mgmt concentration.

like

Where to stay in Berlin for vacation? Hostels/hotels/Airbnb?

like

WFH means more time with the green goddess. More time grinding the herb. How often are you guys meeting aunt Mary? Are you guys safely practicing puff puff pass? I am talking about weed btw

like

Help me weigh the below options: #1: Valuations and port. monitoring analyst (not client facing but interact w/ deal team) at top MF PE firm based in NYC (~$110K all in)

likefunny

Hi fellow EA fish 🐟🐠🐡 I’m hoping to make comp comparisons between MBB and the Big 4 since Glassdoor and other websites aren’t that accurate. Please feel free to DM!

like

Whose getting beaten by ATL weather?

like

Who wants to work in Risk Advisory in ATL, Bham, or Nashville at a firm where you can be your authentic self, and actually have a work/life balance? DHG is looking for good people. Growing 25-35%/yr

like

Anyone work for GoDaddy and would like to recommend me for an accounting or analyst role?

like

Anybody did the apics certification in logistics ? I have the choose between the cslp and cscp but not sure which one I should be doing

Doing some benchmarking as we revisit our leave policy. Do any of your firms offer external career coaching for transitioning into / then back from parental leave? Any organizations you’d recommend or things you’ve found to be particularly helpful / successful? Thank you!

like

I had an initial discussion with a recruiter at Microsoft for a director role. She mentioned that the base salary would be $185K. That sounds very low. But I need help understanding if that’s true at all? — This figure doesn’t account for bonuses and stock. It is purely base. For reference, I have 8+ years of experience. Does anyone know what is the average salary at Microsoft for a director level?

like
like

Any moms take off a few weeks during first trimester? How did it work? Can you use STD instead of PTO? If yes, does that then reduce the STD you have for mat leave? I live in CA if that makes a difference.

like

Here's the situation. I'm a freelance accountant. I have several part time clients, and one main 30-40/hr/week client. This is about the big one. The company has two co-presidents, but for the sake of clarity I'll call the person I directly report to the COO and the other the CEO - note the CEO also is the founder of the company. Again, I report to the COO. The COO is "working" in exchange for greater equity in the company and a crap ton of pay along the way. Cont.

like

Is there any desi consultancy that hires MBA grads around New York area.

funny

Hi 🐟🐟🐟🐟, What is the role and responsibilities of Associate 2 Designation in PWC SDC, What ia the YOE normally for this role and salary range ? PI provide your inputs 😊

like

Hi fishes, I would like to know how it is working for PwC as a Data Analyst. Ofcourse its a big brand but would really like to know the WLB and work culture.

like

New to Fishbowl?

Download the Fishbowl app to
unlock all discussions on Fishbowl.
Download Fishbowl to see what others are saying
That was just a preview…
Sign Up to see all discussions
  • Discover what it’s like to work at companies from real professionals
  • Get candid advice from people in your field in a safe space
  • Chat and network with other professionals in your field
Sign up in seconds to unlock all discussions on Fishbowl.

Already a user?
Login here

Share

Embed this post

Copy and paste embed code on your site

Preview

Download the Fishbowl app

Get realtime notifications and see
what's happening in your industry
from the palm of your hand.

For account settings, visit Fishbowl on Desktop Browser or

General

Legal