Hey /r/personalfinance,
I started a new job in January which does not let new hires contribute to the 401k plan until 6 months in. Since I am now eligible I am attempting to get enrolled within the plan. I submitted my paperwork earlier today where I checked the box stating I wanted to make my contributions as Roth (post-tax) contributions.
The payroll administrator emailed me:
"Just want to confirm that you are electing Roth IRA contributions and not the standard before-tax 401k plan. Is this correct?"
To which I replied:
"I am interested in making 401k contributions through payroll NOT IRA contributions. I wish for my 401k contributions to be Roth (post-tax) 401k contributions, not traditional pre-tax contributions.
Which received a response of:
"I'm unclear on your response below. Are you wishing to choose the Roth retirement plan? Or traditional 401k retirement plan?
My understanding is that 401k and IRA's are two completely different retirement accounts. A 401k is offered through your employer, with contributions being made through payroll, which can either be traditional (pre-tax) or Roth (post-tax), while an IRA is usually handled by the individual and contributions are made either traditional (tax deductible) or Roth (not deductible). Is that correct?
The paperwork I filled out is for a 401k, not an IRA, so I have no clue why he mentioned an IRA in the first email. I had to look up if you could even make IRA contributions through payroll, which you apparently can. I am already making Roth IRA contributions through Vanguard, so I have no interest in a payroll IRA contributions. I was hoping his first email was just a typo, but now I am not sure. I don't want to just say yes and then end up having payroll contributions be made to an IRA and not a 401k.
Submitted July 10, 2023 at 09:18PM by Primalist https://ift.tt/IT70GB9
