401k plan is being terminated, what are my options

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here, I am way behind and I do acknowledge that. I have been cash flowing about $4000 per month for my kids college education that last few years. I was planning to slap most of that right into the 401k and pay off debt as well. So now, I am just not sure what to do with that money. I do not have a brokerage account. I have another 401k for a PT job I have but I don't make enough to increase my contribution in any meaningful way.

The employer is not shutting down, I don't believe.

So... what I'm thinking is that I will roll my one 401k into the other. They are both with Vanguard so that will be easy and I've been happy with them. Then I open an IRA, my goal was to sock away money pre-tax as I have 1099 work so I'd like to lower my tax burden. I know that I will have a much lower contribution limit to an IRA and I believe that it will likely not be able to be tax exempt, if my google research is correct. Would you all suggest a brokerage account for the rest? Should I do a Roth IRA if I'm not going to get a tax reduction?

confused.

Cutting 401ks is a good sign that they are in financial trouble. The plans benefit the people running the company as much as if not more than workers. It's also just about impossible to recruit anyone with options if you don't have any retirement plan

Yes I know, and that's not what I'm asking about. I know more about the situation that I am typing for confidentiality purposes. it is however a somewhat irrational decision being made but there's nothing I can do about it, so need to plan for the future.

[Anonymous]

Put it in IRA and consider back door roth conversion.

[Anonymous]

PP here, sorry I missed that you wanted to do the max with catch up. That sucks.

That being said, your spouse should max out a 401k. You should put 8k in IRA and do a roth conversion and put the rest into a regular money market account. Saving something is better than nothing but you do lose some tax advantages.

Id consider the termination of a 401k plan as a pay reduction and think carefully about a new job.

[Anonymous]

Anonymous wrote:My employer sponsored 401k is being terminated by my employer. I am 55 and my kids are almost out college. I had a plan to sock away the max from next year on and now I don’t know what to do. My Dh does have one as well and i was planning to max his too. What are my options? I am behind in savings for retirement due to many years as a 1099 and with small employers who did not match/contribute.

If you guys are getting medical benefits through your husband's employer, ask yours if you can switch to a 1099. If that's approved, you can open a Solo 401K and rollover your current 401k into the Solo. After that you can contribute upto the max ($23K+$7.5k catchup) as the employee and another 25% of your salary less expenses (SS and other expenses) as the employer's profit share, upto a maximum of $76,500 per year.

[Anonymous]

Anonymous wrote:

Anonymous wrote:My employer sponsored 401k is being terminated by my employer. I am 55 and my kids are almost out college. I had a plan to sock away the max from next year on and now I don’t know what to do. My Dh does have one as well and i was planning to max his too. What are my options? I am behind in savings for retirement due to many years as a 1099 and with small employers who did not match/contribute.

If you guys are getting medical benefits through your husband's employer, ask yours if you can switch to a 1099. If that's approved, you can open a Solo 401K and rollover your current 401k into the Solo. After that you can contribute upto the max ($23K+$7.5k catchup) as the employee and another 25% of your salary less expenses (SS and other expenses) as the employer's profit share, upto a maximum of $76,500 per year.

Now this the advice I was looking for, thank you! I do have a side business of 1099 work so it looks like I could do that option. No idea how to start but something to look into, thanks!

[Anonymous]

Anonymous wrote:Put it in IRA and consider back door roth conversion.

If you already have a rollover IRA or traditional IRA, you can’t do a backdoor Roth due to the pro-rata rule.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:My employer sponsored 401k is being terminated by my employer. I am 55 and my kids are almost out college. I had a plan to sock away the max from next year on and now I don’t know what to do. My Dh does have one as well and i was planning to max his too. What are my options? I am behind in savings for retirement due to many years as a 1099 and with small employers who did not match/contribute.

If you guys are getting medical benefits through your husband's employer, ask yours if you can switch to a 1099. If that's approved, you can open a Solo 401K and rollover your current 401k into the Solo. After that you can contribute upto the max ($23K+$7.5k catchup) as the employee and another 25% of your salary less expenses (SS and other expenses) as the employer's profit share, upto a maximum of $76,500 per year.

Now this the advice I was looking for, thank you! I do have a side business of 1099 work so it looks like I could do that option. No idea how to start but something to look into, thanks!

Glad that helped. You can open a solo 401K at most brokerage houses these days. If you already have a relationship with one, call them. Once you open it, you can transfer all 401Ks and rollover IRAs into it so the money is all in one place. Here's an article on solo 4K providers - https://www.bankrate.com/retirement/best-brokerages-solo-401k/