401K maxed for the first time

[disneysteve]

Until 2016, I was among the roughly half of workers who didn't have access to a 401k. That year, I only worked at the job per diem so could only get a couple thousand dollars into the account. In 2017, I went part time in February and then full time in November so was able to contribute more. But 2018 was the first full year that I was full time and as of this week's paycheck, I've maxed the account at the full $24,500. I fully intend to max it out every year going forward.

[Jluke]

That is awesome!

i hit the 401K max this week as well since I need to contribute each and every paycheck (26 total) to get the full employer match (no true-up).

[kork13]

Congrats, Steve! It's a good feeling to max out the retirement accounts, knowing that you're doing as much as possible to prepare for the future.

DW & I have done it (or come within $500) for 2-3 years now, and this year we'll get very close to maxing both of our TSP accounts again, but I may once again miss it by a few hundred dollars. We slowed down our contributions while we focused on paying off our rental property, then ramped back up in the last 2 months. Pretty sure we'll at least max for DW, which was the biggest goal, given the likelihood of her getting medically retired. Next year, now that it's officially going to happen (probably sometime in Jan/Feb), we're going to try to fill hers up as much as we can... But 60% of base pay is the most she's allowed, and with just a month or we two so to contribute, we won't get her there...but we'll do what we can.

Next question for us will be: Do we roll over her ~$100k TSP to consolidate at Vanguard? We'll have to chew on that one for a little while.

[Like2Plan]

Good job!
This year DH is approaching the max pre-tax/catch up/ after tax & employer contribution limit (I believe it is 61k total), but we will not max it out. It bothers me that we are leaving a little bit of tax advantaged space on the table, but we are striking a balance.

DH is planning to retire-retire early next year, so we will not come close to the max next year, but I am going to make a run for trying to max out the pretax/catch up. With other deductions and taxes, it will not leave much left—so I might have to rethink the plan.

[Like2Plan]

Next question for us will be: Do we roll over her ~$100k TSP to consolidate at Vanguard? We'll have to chew on that one for a little while.

I would be hesitant to do that— TSP is such a good plan and they are making changes starting next year to give you more flexibile withdrawal options.

On the other hand, TSP has a rather quirky rule for beneficiaries. This is in the case of the 2nd death where the beneficiary dies—the beneficiary’s beneficiary(s) does not get the option to roll over to a stretch IRA and must take the remaining balance and pay taxes on it. That could result in a pretty big tax bill.
I am trying to decide what I should do as I also have a TSP account. If I should predecease DH, I’ve told him for goodness sakes roll it over to an inherited IRA (or roll it into his own), but don’t leave it in the TSP!


edited to add link "Important Tax Information About Thrift Savings Plan Death Benefit Payments":

https://www.tsp.gov/PDF/formspubs/tsp-583.pdf

Death benefit payment to a beneficiary (spouse, nonspouse, trust, corporation, legal entity, or estate) from a beneficiary participant account (an account is one that was inherited by the spouse of a deceased TSP participant)

May I Transfer or Roll Over the Payment? No

[corn18]

Congrats DS! How much free money did you get?

kork13, whatever you decide on the TSP, ALWAYS leave a little money in the TSP. That way if you want to roll stuff back into it, you can. Once it's closed, it's gone forever. And that G fund is just the cat's meow for fixed income.

[disneysteve]

Congrats DS! How much free money did you get?

$4,638.61

[corn18]

$4,638.61

That's what I'm talkin' about! Free money, free money. Of course, if the market doesn't find its way back, the bears will be feeding for a while.

[kork13]

And that G fund is just the cat's meow for fixed income.

I didn't mean to hijack the thread, but yes, that's one of the primary reasons that I'm hesitant to roll it out of TSP. The other funds are kinda "meh", but for a bond position, you almost literally cannot beat the G-Fund.

[tripods68]

Congrats Steve! It feels good to max out retirement accounts.

I too, since I turned 50 this year I maxed at $24,500 for my 457....and able to put extra $4,200 to my 401k and additional $6k toward my ROTH through Vanguard. Having said its disheartening to see the ”value go down” amids today’s market volatility. Merry XMAS!

[Jluke]

My excitement for maxing the 401K has disappeared just like my contributions for the year.

[bjl584]

Good job on this. I'm a long way from maxing mine, but I have been contributing to one since I was eligible. A little over 16 years now.

[LivingAlmostLarge]

congratulations! Big accomplishment