{"id":9819,"date":"2025-03-01T06:00:00","date_gmt":"2025-03-01T06:00:00","guid":{"rendered":"https:\/\/riverbend.objectivebrand.com\/?p=9819"},"modified":"2025-03-05T14:29:25","modified_gmt":"2025-03-05T14:29:25","slug":"unlocking-hidden-401k-potential","status":"publish","type":"post","link":"https:\/\/riverbend.objectivebrand.com\/?p=9819","title":{"rendered":"Unlocking Hidden 401k Potential &#8211; Finger Financial Five #203"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"9819\" class=\"elementor elementor-9819\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<section data-particle_enable=\"false\" data-particle-mobile-disabled=\"false\" class=\"elementor-section elementor-top-section elementor-element elementor-element-2f29829 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"2f29829\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-f362b8d\" data-id=\"f362b8d\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-82e7405 elementor-blockquote--skin-border elementor-blockquote--button-view-icon-text elementor-blockquote--button-skin-classic elementor-widget elementor-widget-blockquote\" data-id=\"82e7405\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"blockquote.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<blockquote class=\"elementor-blockquote\">\n\t\t\t<p class=\"elementor-blockquote__content\">\n\t\t\t\t\"It is in your moments of decision that your destiny is shaped.\"\n\t\t\t<\/p>\n\t\t\t\t\t\t\t<div class=\"e-q-footer\">\n\t\t\t\t\t\t\t\t\t\t\t<cite class=\"elementor-blockquote__author\"> Tony Robbins<\/cite>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a href=\"https:\/\/twitter.com\/intent\/tweet?text=%22It+is+in+your+moments+of+decision+that+your+destiny+is+shaped.%22%0A+%E2%80%94++Tony+Robbins&amp;url=https%3A%2F%2Friverbend.objectivebrand.com%2F%3Fp%3D9819\" class=\"elementor-blockquote__tweet-button\" target=\"_blank\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<svg aria-hidden=\"true\" class=\"e-font-icon-svg e-fab-twitter\" viewBox=\"0 0 512 512\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\"><path d=\"M459.37 151.716c.325 4.548.325 9.097.325 13.645 0 138.72-105.583 298.558-298.558 298.558-59.452 0-114.68-17.219-161.137-47.106 8.447.974 16.568 1.299 25.34 1.299 49.055 0 94.213-16.568 130.274-44.832-46.132-.975-84.792-31.188-98.112-72.772 6.498.974 12.995 1.624 19.818 1.624 9.421 0 18.843-1.3 27.614-3.573-48.081-9.747-84.143-51.98-84.143-102.985v-1.299c13.969 7.797 30.214 12.67 47.431 13.319-28.264-18.843-46.781-51.005-46.781-87.391 0-19.492 5.197-37.36 14.294-52.954 51.655 63.675 129.3 105.258 216.365 109.807-1.624-7.797-2.599-15.918-2.599-24.04 0-57.828 46.782-104.934 104.934-104.934 30.213 0 57.502 12.67 76.67 33.137 23.715-4.548 46.456-13.32 66.599-25.34-7.798 24.366-24.366 44.833-46.132 57.827 21.117-2.273 41.584-8.122 60.426-16.243-14.292 20.791-32.161 39.308-52.628 54.253z\"><\/path><\/svg>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<span class=\"elementor-blockquote__tweet-label\">Tweet<\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/blockquote>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-477f180 elementor-widget elementor-widget-text-editor\" data-id=\"477f180\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<h2><b>Unlocking Hidden 401k Potential<\/b><\/h2><p><span style=\"font-weight: 400;\">If you max out your 401(k) contributions yearly, and you are still able to invest beyond that, what should you do?<\/span><\/p><p><span style=\"font-weight: 400;\">Many high earners find themselves in this situation, wondering how to maximize their tax-efficient savings beyond the usual limits.<\/span><\/p><h3><b>Most people are familiar with two types of 401(k) contributions:<\/b><\/h3><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><b>Traditional 401(k):<\/b><span style=\"font-weight: 400;\"> Contributions are made pre-tax, reducing taxable income today, but withdrawals in retirement are taxed at ordinary income rates.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><b>Roth 401(k):<\/b><span style=\"font-weight: 400;\"> Contributions are made after-tax, meaning no tax break today, but withdrawals in retirement are tax-free.<\/span><\/li><\/ul><p><span style=\"font-weight: 400;\">\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">For those under age 50, the total that you are allowed to put into those two accounts combined is $23,500 in 2025.<\/span><\/p><p><span style=\"font-weight: 400;\">For those age 50-59, the total that you are allowed to put into those two accounts combined is $31,000 in 2025. (This limit also applies to those age 64+)<\/span><\/p><p><span style=\"font-weight: 400;\">For those age 60-63, the total that you are allowed to put into those two accounts combined is $34,750 in 2025. (The current rules allow this age group to be eligible for a \u2018super-catch up provision\u2019)<\/span><\/p><p><span style=\"font-weight: 400;\">\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">So what if you are able to save more than those numbers above?<\/span><\/p><p><span style=\"font-weight: 400;\">\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">That is where another option can come into play. Some employers allow their employees to make \u2018After-Tax\u2019 401(k) contributions. This may sound similar to \u2018Roth\u2019, but the rules differ.<\/span><\/p><p><a href=\"https:\/\/riverbend.objectivebrand.com\/buckets\/\" rel=\"attachment wp-att-9822\"><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone size-full wp-image-9822\" src=\"http:\/\/riverbend.objectivebrand.com\/wp-content\/uploads\/2025\/02\/buckets.png\" alt=\"Unlocking Hidden 401k Potential\" width=\"1200\" height=\"628\" srcset=\"https:\/\/riverbend.objectivebrand.com\/wp-content\/uploads\/2025\/02\/buckets.png 1200w, https:\/\/riverbend.objectivebrand.com\/wp-content\/uploads\/2025\/02\/buckets-300x157.png 300w, https:\/\/riverbend.objectivebrand.com\/wp-content\/uploads\/2025\/02\/buckets-1024x536.png 1024w, https:\/\/riverbend.objectivebrand.com\/wp-content\/uploads\/2025\/02\/buckets-768x402.png 768w, https:\/\/riverbend.objectivebrand.com\/wp-content\/uploads\/2025\/02\/buckets-610x319.png 610w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><\/a><\/p><p><span style=\"font-weight: 400;\">Once you\u2019ve reached the limits for maxing out your regular 401(k) contributions (Traditional and Roth), you can contribute additional money to an \u2018After-Tax Bucket\u2019 of your 401(k).<\/span><\/p><p><span style=\"font-weight: 400;\">When considering your own regular contributions, the employer match, AND any \u2018After-Tax\u2019 dollars, the total yearly limit in 2025 for these accounts is $70,000. (Or even higher for those age 50+.)<\/span><\/p><p><span style=\"font-weight: 400;\">When you retire, you can withdraw your original contributions from this \u2018After-tax Bucket\u2019 tax-free, but the problem is that the earnings in that bucket are subject to ordinary income taxes.<\/span><\/p><p><span style=\"font-weight: 400;\">You may say: <\/span><i><span style=\"font-weight: 400;\">\u201cMy capital gains rate is lower than my ordinary income tax rate, so I\u2019m better off putting those extra funds into a regular taxable account\u201d.<\/span><\/i><\/p><p><span style=\"font-weight: 400;\">Not necessarily.<\/span><\/p><p><span style=\"font-weight: 400;\">If your employer allows this \u2018After-Tax bucket\u2019, they may ALSO allow you to convert your contributions to that bucket into a \u2018Roth Bucket\u2019. There are two ways this can happen:<\/span><\/p><p>1. A transfer of funds from the \u2018After-Tax bucket\u2019 to the \u2018Roth 401(k) bucket\u2019 via an \u2018in-plan conversion\u2019.<\/p><p><span style=\"font-weight: 400;\">OR<\/span><\/p><p><span style=\"font-weight: 400;\">2. A transfer of funds from the \u2018After-Tax bucket\u2019 to a Roth IRA via an \u2018in-service rollover\u2019.<\/span><\/p><p><span style=\"font-weight: 400;\">Once the funds are in the \u2018Roth Bucket\u2019, the contributions AND the future earnings will be TAX-FREE when you withdraw them during retirement. Just be mindful about any earnings that occurred IN the \u2018After-Tax Bucket\u2019 PRIOR to converting these funds to the \u2018Roth Bucket\u2019 though.<\/span><\/p><p><span style=\"font-weight: 400;\">\u00a0<\/span><\/p><h3><b>How It Works in Real Life<\/b><\/h3><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Cooper is 45 years old.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">He earns $170,000 per year.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">He only needs $100,000 of his salary and wants to save the rest.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">In 2025, he maxes out his standard 401(k) contributions at $23,500.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">His employer matches $6,500.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">That\u2019s a total of $30,000 in his regular pre-tax 401(k) from his own contributions and the employer match.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Because the overall contribution cap is $70,000, he still has room to add $40,000 in the\u00a0 \u2018After-Tax Bucket\u2019.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">That $40,000 can be moved over to a Roth account, where future earnings will be tax-free.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">\u00a0<\/span><span style=\"font-weight: 400;\">He can repeat this process for years, potentially sheltering hundreds of thousands of dollars of his retirement money into the \u2018Roth Bucket\u2019.<\/span><\/li><\/ul><p><span style=\"font-weight: 400;\">\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">This is really a big deal if done correctly. There are some nuances to how this all works though, and it may not be right for everyone. So we DON\u2019T recommend trying this at home. Be sure to talk to your CPA or Financial Advisor to make sure you do it right.\u00a0\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Some of you might be saying, this is too many numbers and buckets and details to follow. I hear you. We pay attention to all those details, so you don\u2019t have to.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-e55efd1 elementor-widget-divider--view-line elementor-widget elementor-widget-divider\" data-id=\"e55efd1\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"divider.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-divider\">\n\t\t\t<span class=\"elementor-divider-separator\">\n\t\t\t\t\t\t<\/span>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-5f8b0d3 elementor-widget elementor-widget-text-editor\" data-id=\"5f8b0d3\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">Watch our new video that just dropped on<\/span><a href=\"https:\/\/www.youtube.com\/channel\/UCRdrF1BetxOXKNIkHBWjUlA\" target=\"_blank\" rel=\"noopener\"> <span style=\"font-weight: 400;\">YouTube<\/span><\/a><span style=\"font-weight: 400;\">!<\/span><span style=\"font-weight: 400;\"><br \/><\/span><span style=\"font-weight: 400;\"><br \/><\/span><a href=\"https:\/\/youtu.be\/auE1ohdjXfU\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Every Retiree Must Know This<\/span><\/a><span style=\"font-weight: 400;\">: Uncover the secrets to tackling unexpected challenges, making smooth transitions, and creating a retirement you\u2019ll truly love!<\/span><\/p><p><a href=\"https:\/\/youtu.be\/auE1ohdjXfU\" rel=\"attachment wp-att-9823 noopener\" target=\"_blank\"><img decoding=\"async\" class=\"alignnone size-full wp-image-9823\" src=\"http:\/\/riverbend.objectivebrand.com\/wp-content\/uploads\/2025\/02\/T6-Every-Retiree-Must-know-this.jpg\" alt=\"Every Retiree Must know this\" width=\"1920\" height=\"1080\" srcset=\"https:\/\/riverbend.objectivebrand.com\/wp-content\/uploads\/2025\/02\/T6-Every-Retiree-Must-know-this.jpg 1920w, https:\/\/riverbend.objectivebrand.com\/wp-content\/uploads\/2025\/02\/T6-Every-Retiree-Must-know-this-300x169.jpg 300w, https:\/\/riverbend.objectivebrand.com\/wp-content\/uploads\/2025\/02\/T6-Every-Retiree-Must-know-this-1024x576.jpg 1024w, https:\/\/riverbend.objectivebrand.com\/wp-content\/uploads\/2025\/02\/T6-Every-Retiree-Must-know-this-768x432.jpg 768w, https:\/\/riverbend.objectivebrand.com\/wp-content\/uploads\/2025\/02\/T6-Every-Retiree-Must-know-this-1536x864.jpg 1536w, https:\/\/riverbend.objectivebrand.com\/wp-content\/uploads\/2025\/02\/T6-Every-Retiree-Must-know-this-610x343.jpg 610w\" sizes=\"(max-width: 1920px) 100vw, 1920px\" \/><\/a><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-0e3ebc2 elementor-widget-divider--view-line elementor-widget elementor-widget-divider\" data-id=\"0e3ebc2\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"divider.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-divider\">\n\t\t\t<span class=\"elementor-divider-separator\">\n\t\t\t\t\t\t<\/span>\n\t\t<\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-f6180b8 elementor-widget elementor-widget-text-editor\" data-id=\"f6180b8\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><i><span style=\"font-weight: 400;\">On the lighter side, Dan, Paul &amp; Jeremy are running the<\/span><\/i><a href=\"https:\/\/mbmarathon.com\/?utm_source=google&amp;utm_medium=cpc&amp;utm_campaign=18388800140&amp;utm_content=695019687520&amp;utm_term=myrtle%20beach%20marathon&amp;gad_source=1&amp;gclid=CjwKCAiAt4C-BhBcEiwA8Kp0CZyQpcBaD1OIffNi6XNqSyb95MOnTWihHOjVs5CY640iT7vdXRUv3BoCaHAQAvD_BwE\" target=\"_blank\" rel=\"noopener\"> <i><span style=\"font-weight: 400;\">Myrtle Beach Marathon<\/span><\/i><\/a><i><span style=\"font-weight: 400;\"> this weekend. If you are out come stop by and cheer us on! <\/span><\/i><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>&#8220;It is in your moments of decision that your destiny is shaped.&#8221; Tony Robbins Tweet Unlocking Hidden 401k Potential If you max out your 401(k) contributions yearly, and you are still able to invest beyond&#8230; <a class=\"read-more\" title=\"FULL STORY\" href=\"https:\/\/riverbend.objectivebrand.com\/?p=9819\">Read More<\/a><\/p>\n","protected":false},"author":11,"featured_media":9821,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[4],"tags":[135],"class_list":{"0":"post-9819","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finger-financial-five","8":"tag-401k","9":"entry"},"acf":[],"_links":{"self":[{"href":"https:\/\/riverbend.objectivebrand.com\/index.php?rest_route=\/wp\/v2\/posts\/9819","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/riverbend.objectivebrand.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/riverbend.objectivebrand.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/riverbend.objectivebrand.com\/index.php?rest_route=\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/riverbend.objectivebrand.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=9819"}],"version-history":[{"count":7,"href":"https:\/\/riverbend.objectivebrand.com\/index.php?rest_route=\/wp\/v2\/posts\/9819\/revisions"}],"predecessor-version":[{"id":9829,"href":"https:\/\/riverbend.objectivebrand.com\/index.php?rest_route=\/wp\/v2\/posts\/9819\/revisions\/9829"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/riverbend.objectivebrand.com\/index.php?rest_route=\/wp\/v2\/media\/9821"}],"wp:attachment":[{"href":"https:\/\/riverbend.objectivebrand.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=9819"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/riverbend.objectivebrand.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=9819"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/riverbend.objectivebrand.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=9819"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}