I started with my company 6 months ago. They were in the middle of a merger and I wanted to wait until the merger finished and they decided which 401K program they were going to use. Now it has been decided, but I'm not sure whether to wait until Jan 1 to start contributing or just start now. Which option is best for tax purposes?
2006-10-10 01:19:27 · 8 answers · asked by Gufs99 1 in Business & Finance ➔ Personal Finance
The sooner you start, the more money you can put into your 401k and the less taxes you will pay. Remember, all money placed into a 401k is tax deferred. Also, does your company match any contribuitions? You do not want to miss out on any of that.
2006-10-10 01:26:11 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Penalty is calculated on the quantity withdrawn. extra precisely, what concerns is the quantity of taxes no longer paid because of the fact the quantity replaced into deferred. Matching or employment have no longer something to do with it. think of of it this way: in case you probably did no longer have 401k, the money could be on your paycheck and the taxes could heve been paid. Now, while your earnings, you pays those taxes plus penalty. How lots relies upon on your tax bracket.
2016-10-16 00:59:15 · answer #2 · answered by kigar 4 · 0⤊ 0⤋
I hope a financial "specialist" also answers your question - as I'm NOT an expert...
...but I believe you CAN enjoy meaningful tax deferrment and savings by joining a 401K at ANY time in the calendar year.
I know when it comes to IRAs, experts ENCOURAGE you to make contributions as late as December, so....
Anyway. Just wanted to share my opinion. This IS worth your following up on.
CB
2006-10-10 01:24:41 · answer #3 · answered by ceebee3504 1 · 0⤊ 0⤋
The sooner the better. And if you can afford it increase it by 1% every year until you get to the max of 15% so that you have enough money to live on when your older.
2006-10-10 01:28:35 · answer #4 · answered by Carol 3 · 0⤊ 0⤋
Start right now. Especially if your company makes matching deposits to the plan. You should deposit enough to get the maximum company match -- that's free money for you and you're a fool for every day that you delay partitipation.
2006-10-10 03:08:22 · answer #5 · answered by Bostonian In MO 7 · 0⤊ 0⤋
Start now. The tax savings occur by having a pre-tax deduction, and could also put you in a lower tax bracket for this year by reducing your taxable income.
2006-10-10 01:30:59 · answer #6 · answered by rosecitylady 5 · 0⤊ 0⤋
NOW is better. you can exclude it from your income for this year.
Contribute as much as you can. And keep it up for the next year.
Contribute as much as you can as soon as you can, because the sooner you put it in the more it grows before you have to retire and live off of it.
2006-10-10 01:27:29 · answer #7 · answered by Sufi 7 · 0⤊ 0⤋
I think, start now
2006-10-10 01:26:17 · answer #8 · answered by zuj 3 · 0⤊ 0⤋