Originally Posted by
spaaks
what is the income level where one needs the RHA to capture the company money if they do as y'all have said and max out 401k early, get max company B fund contribution? i.e. at what income level/years of service are you leaving company money on the table if you max out everything?
You never leave money on the table, it is just a matter of where it goes. We are paid 16% on top of our salary that goes into:
1st: the 401K
if the 401 k has reached its limit of 56K (61K if over 50) then:
2nd: RHA
If you go over the max amount of earning for consideration into a retirement account (280K) then
3rd: Cash in your check as taxable income
If you as a pilot contribute your max before tax contribution of 19K (25K if over 50) before the company has contributed the 37K necessary to get to the limit of 56K (61K if over 50) then all the remaining monies you have in salary after that point will result in the 16% going into your RHA, until your salaray hits 280K. The math on that comes out to a need to complete your individual contributions to your 401K before you make about 230K for the year. Then the 16% on the next 50K of earnings (280-230) will go into your RHA, or about 8K. Then if you are still earning money, the 16% for the remaining salary will come in your paycheck.
If you don't contribute any money yourself at all, then the 16% won't hit the Max (56K) before you hit the 280K salary mark. At that point the 16% would then just come as money in your check for all salary above 280.