Your husband is 61, so at this point, he can make withdrawals from his retirement accounts at any time and without penalty. I know it's hard, but it's important for someone to separate their feelings about their job and employer from influencing decisions about the employer's retirement plan that would be in their interest. If your husband can contribute the full $30,500 (regular plus "catch up") into his employer's plan this year and subsequent years (& reducing his taxable income by doing so), I absolutely would do that. The 5% employer match would be icing on the cake. And fund the HSA also (regular plus $1000 "catch up").He has been so incredibly unhappy with some job responsibilities that were being heaped onto his plate that I really didn’t think he was going to stay until 62. So we have been making decisions based on the downside of him leaving employment and having 9 years to fund before he takes SS.
That is an odd vesting schedule. My employer had a similar one, but it was graduated (IIRC), and phased in at 20%, 40%, 60%, 80%, 100% (they subsequently changed to immediate vesting).Kudos to the company for finally making the needed changes to his job responsibilities so he could see a path to stay until 65. So it is now a wait and see on if things truly have changed and he remains content to stay. The vesting is 20% at 2 years and 100% at 5 years of service.
My employer's plan doesn't have a total stock offering either, but they do have an S&P 500-tracking choice that I am happy with. If you type in the investment choices available in his plan (including the expense ratios), the board members can review it. As it is, I think VVIAX is okay (I've definitely owned worse).I have thought about rolling the IRA to the 401k - but I have been underwhelmed on the investment choices. All seem to be higher expenses than We currently have - and there isn’t anything offered that would mimic a Total Stock or Total Bond option. I also think there may be related management fees. but I should explore this more - we could be in a position to do mega backdoor if he continues to work. Thanks for the insight
I'm sorry that I'm not very familar with TIPS and have not ever owned any. I'm mostly an equity and municipal bond fund investor. The board's general recommendation is to hold fixed income securities in traditional (pre-tax) retirement accounts, and equity in the after-tax (Roth) accounts, and it looks to me that you all are already doing that.
If your husband's employer allows after-tax (non-Roth) contributions, I would do that if you can swing it; contribute the full $30500 on a pre-tax (traditional) basis, and any over that as after-tax contributions.
If he wants to make back door Roth IRA contributions, he would want to move his Vanguard IRA into the employer-sponsored retirement plan first to clear the deck from being subject to the pro-rata rules concerning Roth conversions.
Statistics: Posted by backpacker61 — Wed Jun 12, 2024 6:13 am