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Employer Match and Roth IRA Contribution Limits

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HankTheTank910

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Hey all.

Just a couple quick questions. I am fortunate enough to be a part of a residency in which my employer will match up to a certain percentage of my income to my 401k. I am personally contributing the max of $5500 through Roth, and they are also contributing a significant portion on top of my $5500. My question lies in the taxes allocated to their contribution, and I have a couple of them:

1. Does their match contribute to my limit of $5500 per year?
2. Will I be taxed on the balance that they invest upon withdrawal, or are those considered after-tax contributions as well?

Just trying to sort through the mess, any and all comments are welcomed!
 

RangerBob

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Do you have a Roth 401k through work? My understanding is these are quite rare, bu they still work the same way as a Roth IRA (tax-free growth/withdrawals). I do not believe the 401k contributions count towards you $5500 limit for the Roth IRA contributions, and the IRS looks at them differently (401k vs IRA).

If you just have a traditional 401k, then it definitely doesn't impact your Roth IRA contribution, and it will be taxed when you make withdrawals.

I'm assuming you mean your employer is matching your 401k contributions--or do you mean they are contributing to your Roth IRA? That would be really confusing if they were contributing to your IRA, but if they were somehow doing that it would count towards your limit.

Traditional 401k/Traditional IRA: Pay taxes when you withdraw
Roth 401k/Roth IRA: Pay taxes now
 

mvenus929

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What kind of residency matches contributions to a Roth?

Most employers, if they have a match, will match your contributions to a 401k (pre-tax) up to a point (usually in the 1-5% of your income range). What you contribute to a Roth beyond that is completely separate--it's not even the same account.
 
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