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Author: debo Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76398  
Subject: 401k plans Date: 2/18/1998 9:02 AM
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My husband funds his 401k to the max each year. I started working part-time and my employer also offers a 401k. Can I fund mine also, even though my husband's is fully funded and we file a joint return?
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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1839 of 76398
Subject: Re: 401k plans Date: 2/18/1998 10:06 AM
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Greetings, Debo, and welcome.

<<My husband funds his 401k to the max each year. I started working part-time and my employer also offers a 401k. Can I fund mine also, even though my husband's is fully funded and we file a joint return?>>

You sure can, and your contribution can be made up to the limits of your plan. In general, between you and your employer you can put in up to 25% of your pay or $10K, whichever comes first.

Regards....Pixy

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Author: fasterfool Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1877 of 76398
Subject: Re: 401k plans Date: 2/20/1998 4:58 PM
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Pixy,

Got a question about your comments --

<< You sure can, and your contribution can be made up to the limits of your plan. In general, between you and your employer you can put in up to 25% of your pay or $10K, whichever comes first.>>

Does the $10K max include contributions from both you and your employer or does the $10K max just include what you contribute?

Thanks for the clarification,
Fast

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Author: snoopy33 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1880 of 76398
Subject: Re: 401k plans Date: 2/20/1998 7:05 PM
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Hey there,

Q: Does the $10K max include contributions from both
you and your employer or does the $10K max just
include what you contribute?

A: The $10K max is the COMPLETE total regardless of
whether your employer matches your contributions
or not.

Let's say, your employer kicks in $1 for every
$1 you put in ... the $10K max would then consist
of $5000 of your cash and $5000 that your employer
kicked in.



Hope this helps

snoopy33@rocketmail.com



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Author: WadaPhooliam Big gold star, 5000 posts Top Recommended Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1881 of 76398
Subject: Re: 401k plans Date: 2/20/1998 8:42 PM
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<< A: The $10K max is the COMPLETE total regardless of
whether your employer matches your contributions
or not. >>

Gotta strongly disagree on this one. The rule is that you can contribute a maximum of $10000 of YOUR own money (used to be $9540). Company contributions are extra. Contributions to my own 401k (my contributions plus company contributions) have exceeded $10k for several years.

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Author: fasterfool Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1887 of 76398
Subject: Re: 401k plans Date: 2/21/1998 8:59 AM
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<< << A: The $10K max is the COMPLETE total regardless of
whether your employer matches your contributions
or not. >>

Gotta strongly disagree on this one. The rule is that you can contribute a maximum of $10000 of YOUR own money (used to be $9540). Company contributions are extra. Contributions to my own 401k (my contributions plus company contributions) have exceeded $10k for several years. >>

Ok - I need a tie breaker!!! This is pretty important since it defines when I'll need to start venturing outside my 401 K. I just started a new job a year ago and I'm getting ready to start contributing to 401 K. I'm gonna max my contributions which with my employer contribution will put me over $10K.

BTW - if you are contributing too much, who tells you? Does your employer state that your contributing too much and need to cut down on the percentage?

Finally, in my attempt to be completely foolish, I will max out my contribution percentage to my 401K plan. The only mutual fund choice I have that even comes close to the Vanguard Index Fund is the Vanguard Growth and Income Fund. It seems to have actually done better than Vanguard Index over the past 10 years. Anyone know much about this fund?

Thanks for your help,
Fast

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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1888 of 76398
Subject: Re: 401k plans Date: 2/21/1998 11:51 AM
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Greetings, Fast, and welcome.

Got a question about your comments --

<< Does the $10K max include contributions from both you and your employer or does the $10K max just include what you contribute?>>

The $10K is the absolute dollar maximum that comes out of your gross pay and does not include any money your employer may contribute to the 401k plan. The overall percentage limit of 25% means that some folks may not be able to reach the $10K.
As an example, someone who makes $30K would be limited to a maximum contribution of $7.5K as the salary reduction.

Regards….Pixy



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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1890 of 76398
Subject: Re: 401k plans Date: 2/21/1998 11:54 AM
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Snoopy33,

<<Q: Does the $10K max include contributions from both
you and your employer or does the $10K max just
include what you contribute?

A: The $10K max is the COMPLETE total regardless of
whether your employer matches your contributions
or not.

Let's say, your employer kicks in $1 for every
$1 you put in ... the $10K max would then consist
of $5000 of your cash and $5000 that your employer
kicked in. >>

That is incorrect. The $10K is the maximum elective contribution made by the employee. The employer's matching contribution does not affect that maximum.

Regards……Pixy


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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1894 of 76398
Subject: Re: 401k plans Date: 2/21/1998 12:00 PM
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Greetings, FasterFool, and welcome.

<<Ok - I need a tie breaker!!! This is pretty important since it defines when I'll need to start venturing outside my 401 K. I just started a new job a year ago and I'm getting ready to start contributing to 401 K. I'm gonna max my contributions which with my employer contribution will put me over $10K.

BTW - if you are contributing too much, who tells you? Does your employer state that your contributing too much and need to cut down on the percentage?

Finally, in my attempt to be completely foolish, I will max out my contribution percentage to my 401K plan. The only mutual fund choice I have that even comes close to the Vanguard Index Fund is the Vanguard Growth and Income Fund. It seems to have actually done better than Vanguard Index over the past 10 years. Anyone know much about this fund? >>

Rest easy. You may contribute up to a maximum of 25% of your pay or $10K to your 401k, whichever amount is the lesser. You - not the employer - are responsible for ensuring you do not exceed that amount. Nevertheless, most employers keep track of this and will inform you if you exceed the limit. As to the Vanguard Growth and Income fund, you can check out its record with your benefits administrator or at Morningstar's website (www.morningstar.com) or at Vanguard's website (www.vanguard.com).

Regards……Pixy


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Author: snoopy33 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1895 of 76398
Subject: Re: 401k plans Date: 2/21/1998 5:43 PM
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Hey,

Thanks for clearing that up. Not that I can take
advantage of it since my employer doesn't match
any contributions but I'll keep note of this
for future reference.



snoopy33

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Author: fasterfool Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1902 of 76398
Subject: Re: 401k plans Date: 2/22/1998 9:18 AM
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Thanks Pixy - I appreciate your help.

Fast

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Author: rogerd One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1920 of 76398
Subject: Re: 401k plans Date: 2/23/1998 8:32 AM
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<<The $10K is the absolute dollar maximum that comes out of your gross pay and does not include any money your employer may contribute to the 401k plan. The overall percentage limit of 25% means that some folks may not be able to reach the $10K.>>

While we're on this topic, can you tell us the limits for a 403(b), and are there any differences between what I can do with 401(k) and 403(b) money when I leave my employer? I plan to roll everything from my 403(b) into a self-directed IRA when I move on, if the rules are the same as for a 401(k).

Thanks for the help and the good advice.

- Roger

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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1922 of 76398
Subject: Re: 401k plans Date: 2/23/1998 9:38 AM
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Roger,

<<While we're on this topic, can you tell us the limits for a 403(b), and are there any differences between what I can do with 401(k) and 403(b) money when I leave my employer? I plan to roll everything from my 403(b) into a self-directed IRA when I move on, if the rules are the same as for a 401(k). >>

The 403b has the same limits as the 401k (i.e., 15% of compensation or $10K, whichever is lesser). The 403b does include a "catchup" provision that allows some folks who are close to retirement to exceed that amount to make up their lack of particiaption in earlier years. It's complicated to explain, so I won't.

When you leave or retire, you may roll the 403b money to a self-directed IRA should you so desire. That way you can get of funds and annuities and into the world of direct stock trading instead.

Regards....Pixy

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Author: rogerd One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 1941 of 76398
Subject: Re: 401k plans Date: 2/24/1998 8:59 AM
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"That way you can get of funds and annuities and into the world of direct stock trading instead."

Thanks Pixy.

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