How much can 401k contributions lower your taxes?
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- เผยแพร่เมื่อ 9 พ.ค. 2024
- In this video, I discuss how contributing to a 401k can affect your taxes and paycheck. Many people wonder whether they should choose the traditional or Roth side of the 401k, assuming that the Roth side means tax-free growth. However, it's important to note that Roth contributions are made after taxes.
To better understand the impact, I share a useful calculator I created on Google Sheets, as well as a paycheck calculator. These tools help you determine how much your paycheck will be affected by 401k contributions. It's crucial to consider factors like future tax rates, retirement expenses, and potential tax credits or deductions.
I encourage a diversified approach to tax strategies and advise considering both traditional and Roth contributions. By prioritizing credits and deductions through pre-tax contributions and then allocating to the Roth side, you gain flexibility. Keep in mind that everyone's situation is different, so it's essential to make your own decision based on your specific circumstances.
To further assist you, I demonstrate how the 401k contributions impact your paycheck using the calculator and a reputable online calculator from ADP. These tools help alleviate anxiety and apprehension about contributing to your 401k, as you can see the actual numbers and plan accordingly.
If you want to access the Google sheet calculator check out our Discord channel.
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![How to calculate solo 401k contributions [Self Employed Retirement Plan]](/img/n.gif)
Google sheet is now on the discord server here discord.gg/enuJThjHJ9
Do you really have to pay to get access to these Google sheets? Seems silly
Thanks glad you made this video!
Would you please provide a link to the Google Sheet?
Exactly! This is exactly my struggle right now in deciding whether to do a Roth Solo 401k or a Traditional Solo 401k. The quarterly income taxes are going to put a huge damper on the amount I can send to the Solo 401k each month. Not sure which way to go.
i would go for the pre tax if you think your tax will be less or the same amount wene you retire that way you contribute more and have more later on. if you think your tax will be more later i would consider a IRA.
Good stuff❤😊
Thanks ✌
It would be interesting to know what the median withdrawal amount is annually?
Hi, I asked this on another video of yours: Can I add to my 401K for last year 2023 before April 15, 2024? Let’s say I have 15k in and I am over 50. Can I still add to it or catch up or does it all have to be before December 31st 2023? Thanks
The only other thing left out here in respect to the calculation are other additional tax credits for dependents, etc. correct ?
generally, yes.
Hey Travis, do you know why the IRS withholding estimator considers our 401K and HSA contributions as other income? Telling us to put the total of all of them as other income on 4a of the W4.
Strange.
It's not contributions. ONLY distributions from those accounts and those are ONLY from the pretax accounts not the Roth 401k.
@@TravisSickle Agreed. If you have a moment, play with the estimator and tell it you contribute to 401k and/or HSA, and you will see it's telling you to put it as other income.
I have to believe it's broken.
I noticed that too.
How can I get the google sheet. Thank you
I posted it on the discord channel. Link in description.
So I'm saving pre tax now but I don't plan to buy a home until I retire. Would post tax be better?
are you thinking of using the money in your retirement account for the home purchase?
@@TravisSickle Maybe 🤔 I have a pension and a 401k
How is 190k in the 22% tax bracket?
Do you think that is too much or too little?
@TravisSickle it's to little!
Taxes will be going up. Period.
they don't always go up but it sure looks like it must given the ridiculous spending over the last 100 years. I believe the expenses will inevitably come down or we will have some serious issues.
My company will match both roth and pre tax. Should i just put in both?