My goal is to invest more pre-tax money now.

I currently max out my 401k. Unfortunately my employer doesn't match anything at this time.

Can I also contribute beyond the $23,500 to a rollover IRA that used to be a 401k from a prior employer? It's all pre-tax/tax deferred, so I don't want to put any post tax money in there (not sure if that's even allowed anyway). I read the IRS website to say this is legal/possible, but ADP people that do our payroll seem confused by my request.

I also contribute to an HSA pre-tax, but I don't want to up that any more as I don't want to limit funds to medical use only.

TIA

I'm confused about your APD payroll comment. You'd have to contribute on your own to your IRA and manage the tax benefits through your W4 and 1040, right?

I am with Ben…don't know what you are trying to accomplish. Through payroll your only options are your employers plan Traditional or Roth up to the max (currently $23,500) and After Tax Contributions if allowed.

If you are maxing out your employer 401k, ask them about a mega backdoor Roth. These would be after tax contributions that roll over from your 401k to a Roth (with all the tax benefits). This rollover happens behind the scenes and is managed by your 401k plan (so it would be hands-off for you, if you didn't want to redirect the contributions to somewhere specific).

Your plan has to allow this (ask about in-plan or in-service distributions), but you can potentially contribute another $46,500 into it (the max for pre-tax 401k and after-tax mega backdoor combined contributions is $70k).

If you're saving all that coin, go ahead and max a roth as well.

Thanks guys. I'd forgotten I could use HSA money for anything after 65, so great point there.

The payroll comment is in regard to my question. I guess the answer is I cannot do IRA contributions from payroll outside of our 401k.

JSKolache said:

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If you're saving all that coin, go ahead and max a roth as well.

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My wife went back to work full time last year, so now we're over AGI limit for joint filers. I'm going to look at backdoor through work plan.

3rdGenAg05 said:

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JSKolache said:

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If you're saving all that coin, go ahead and max a roth as well.

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My wife went back to work full time last year, so now we're over AGI limit for joint filers. I'm going to look at backdoor through work plan.

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You probably don't want to do a backdoor Roth if you have an old 401k that's now in a Traditional IRA. That would invoke the pro-rata rule and increase your tax burden.

3rdGenAg05 said:

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My goal is to invest more pre-tax money now.

I currently max out my 401k. Unfortunately my employer doesn't match anything at this time.

Can I also contribute beyond the $23,500 to a rollover IRA that used to be a 401k from a prior employer? It's all pre-tax/tax deferred, so I don't want to put any post tax money in there (not sure if that's even allowed anyway). I read the IRS website to say this is legal/possible, but ADP people that do our payroll seem confused by my request.

I also contribute to an HSA pre-tax, but I don't want to up that any more as I don't want to limit funds to medical use only.

TIA

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If you're talking about a Mega Backdoor Roth conversion within your current 401k, all of that money beyond the initial $23,500 is going to be post tax. Your only pre-tax options are 401k up to $23,500 and HSA.

If you could move your current pre-tax IRA and roll it into your current 401k, then you could do a backdoor Roth, but again that's post-tax.

3rdGenAg05 said:

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JSKolache said:

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If you're saving all that coin, go ahead and max a roth as well.

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My wife went back to work full time last year, so now we're over AGI limit for joint filers. I'm going to look at backdoor through work plan.

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You need to specifically ask for a mega backdoor Roth. Backdoor Roth and mega backdoor Roth are two totally different things.

You need to call whoever administers your 401k to ask about it (ie, Fidelity, or some equivalent). Don't bother asking HR.

Good to know they're different. I wasn't tracking that. Thanks. I'll educate myself and call Empower.

Re pre-tax limits, I now understand my 401k and HSA are the only options. It's annoying that if a company matches you can get over $23,500/year, but if you just want to contribute more yourself you cannot (if I've got that right; I've never had a company match).

I'll just max HSA and look at post-tax options from here.

Thanks again

Thanks for your responses as well. Since it would seem I'm down to post-tax options, I should talk to my CPA and discuss tax burden now to reduce taxable income in retirement. My wife and I both have Roths we used to invest in before getting to the AGI limits.

3rdGenAg05 said:

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Good to know they're different. I wasn't tracking that. Thanks. I'll educate myself and call Empower.

Re pre-tax limits, I now understand my 401k and HSA are the only options. It's annoying that if a company matches you can get over $23,500/year, but if you just want to contribute more yourself you cannot (if I've got that right; I've never had a company match).

I'll just max HSA and look at post-tax options from here.

Thanks again

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The $23,500 limit is only for pre-tax dollars. Like I posted above, with a mega backdoor Roth, you can contribute up to $70k (total combined with any company matching contributions), it's just that your contributions over the $23,500 are after tax.

Six you can contribute more than $23,500 a year, it's just not all tax free.

Since your company's contributions don't affect your taxes at all at this point, the company match is irrelevant to that. You're gonna pay taxes on your pre-tax contributions eventually (as well as the company match contributions).

Edit: just read through the thread. Surprised no else noticed this likely isn't even an option

3rdGenAg05 said:

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Thanks for your responses as well. Since it would seem I'm down to post-tax options, I should talk to my CPA and discuss tax burden now to reduce taxable income in retirement. My wife and I both have Roths we used to invest in before getting to the AGI limits.

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If your AGI > Roth limits it's over the limit to make a tax deductible contribution to your regular ira

Edit to add something potentially useful: needing more places to store pretax money after maxing out all other options is one of the few areas where whole life insurance might actually make sense if you want to look into that route