Guess I'm totally confused. BLOB said Guys can hit the IRS Income Cap (of 275k) using their own money.

Still not thinking it means what you think it means, Pinseeker...but go ahead and explain to me why No one Said that and I'm wrong anyways

 

Ok, I missed that he said income cap. Reading through his whole post, I knew he was referring to the contribution cap.

I would have thought with your knowledge, you would have cut him a break on the typo. If you are going to be so picky, he never said "of $275K" as you stated in your post. You added that in yourself. As a matter of fact, he didn't use "$275K" in the entire post you quoted.

Now, about your random capitalization, what's up with that?

Speaking of not meaning what you think it means, have you explained to the union yet that they are wrong when they say that the company is abusing "known R days" when using the SLG. The union has put out a message stating so, but since you know better, I'm sure you have let them know.

 

Above $275k income you get no more B fund contributions. The $275k is what you earned...your income. When you get above that level B fund contributions stop. The $275k income is your earnings. You earn it with your wages. It is the number on which the company calculates their B fund contribution. The B fund is the company’s contribution.

Are you arguing a point, do you not understand that, or arguing semantics. If it’s the latter, our time is better served evaluating the advantages and disadvantages of various options.

 

This is what I said.

Truth is TonyC reversed the actual limits
401(a)17 limit is 275k. Beyond which Mgt makes No additional Contributions, regardless of whether the B plan rate is 8%, 9%, or 20%

the 415(c)(1)(a) limit is 55k. Beyond which no DC contributions are possible (other than Catch-up for those of us at least 50 in any given year).

A 20% B fund would result in a 55k input to your B fund, means 0 dollars available to contribute to your 401k Traditional or Roth, and no Aft Tax dollars available for the eventual Big Roth IRA roll over.

And also means once your Income hits 275k, no additional money comes your way

currently

 

Your post #104 you call it a $275k salary cap. I called it an income cap. The IRS calls it a compensation limit. You know what I mean. You can disagree with a point and provide counter arguments. There are plenty of countering points and I think most folks want to hear ideas from other folks with ideas they might not have considered. I don’t claim to have all the answers...Or you can keep trying to deflect away from the subject with semantics when you feel you can’t articulate a legitimate point.

So if we can stop being a sea lawyer and get back to the issue that would help.

You still haven’t answered my question. Would you take a 10% B fund with cash over cap or 12% with no cash over cap? And why?

 

For someone who makes $275k or more, a 20% company contribution to the B fund would mean $33k less that they would have to contribute to their 401k in order to reach the $55k limit (compared to the 8% they get now). Even for anyone who makes less, it would mean less of their own contribution to their 401k in order to reach the limit. That increase their disposable income. They can use those after tax dollars for investing in their own. Isn’t that a good thing?

 

Two pilots walk into a bar both wearing new approved jackets with epaulets on them so we know who the captain is. In our story both wear 4 stripes. Pilot K works for company X and Pilot F works for company F.

Pilot K says, "I make $275,000 as a WB captain and I get 8% in a B fund. We've got a pension too. I put $18,500 in my pre-tax 401K. The company puts $22K in that B fund and I get to put another $14.5K of my money in after tax 401K and immediately roll it to a Roth. I'm pretty happy with my compensation package and I sure wouldn't want to raise my B fund because next year I won't get any cash over the cap and I really like my tax deduction for my pre-tax 401."

Pilot F says, "Wow, I make $275K at my company too. We have a pension too and I get a 20% B fund. The company puts $55K into my B fund. I use the extra $33K for whatever I want. One year I used it for my back door Roth. One year I funded my kid's college fund. One year, I took a vacation. It's just nice knowing that I'm fully funded to my 415c limits without using any of my income, salary, compensation (you pick the word). It was also very nice when I was an FO not making $275K because the company was putting more into my B fund earlier in my career and I hit that $55K limit sooner."
Questions
1. Which pilot in our story is better off?
2. Which one drinks the $200 bottle of champagne?
3. Which one will live under a bridge and eat cat food in retirement?

 

Well, those sentences really didn't make sense, but I think I can figure out what you are trying to say.

You're correct, $3.25M at a 4% ROI will give you $130K for life. Of course, so will a lot less, unless of course, you are immortal, then you will need your scenario.

 

Blob, you explained that quite well.

Would you like to be on the next NC and the R&I committee?

We could use a man with your clarity better than the idiots that are in charge now!!!

Everyone needs to read and understand his post.

We could increase the B fund, get cash over cap, keep the 130K A fund, and come out ahead of this BS VB plan!!!

 

Pilot K is because he purchased the winning Mega Millions ticket