Todays Suze School Summary Listen to today's podcast and this will help you remember --- Roth IRA/ Traditional IRA (2026) Max Contribution • $7,500 if you’re under 50 • $8,600 if you’re 50+ You have to have earned income to contribute to an IRA The max is 100 percent of your earnings or the max contribution whichever one is less Income qualifications for a Roth • MAGI limits:• Filing Single: max contribution < $153k, partial $153–168k, none ≥ $168k • Married filing jointly: full < $242k, partial $242–252k, none ≥ $252k • Married filing separately: if you lived with your spouse → no Roth if MAGI > $10k * Married filing separately but do not live with your spouse even for one day max contribution < $153k, partial $153–168k, none ≥ $168k Contributions limits for 401(k), 403(b), TSP Employee (2026) • $24,500 under 50 • $32,500 age 50+ • $35,750 ages 60–63 (super catch‑up) Your employer match does not count toward these limits. --- The 2026 Roth‑Only Catch‑Up Rule If you are 50 or older AND earned more than $150,000 from your employer in 2025 w2 Your catch‑up MUST be Roth. If your employer doesn’t offer a Roth 401(k) or 403b they must either: 1. Add a Roth 401(k) or Roth 403b or 2. Eliminate catch‑ups entirely Most will add the Roth option now for they have no choice The TSP already has a Roth Option --- The 415(c) Limit — Your Secret Weapon This is the max that can go into your plan from ALL sources under 415(c) (employee + employer + after‑tax), plus catch‑up on top if you’re older: Under 50: up to $72,000 per employer (or 100% of your pay, if lower) Age 50+: up to $72,000 + $8,000 catch‑up = $80,000 per employer (if pay is high enough) Ages 60–63: up to $72,000 + $11,250 “super” catch‑up = $83,250 per employer (if pay is high enough) This includes: • Your employee contribution • Your catch‑up • Employer match • After‑tax contributions --- After‑Tax Contributions (Mega Backdoor Roth) If your plan allows after‑tax contributions, you can fill the space between: {Your contributions + employer match) with after tax contributions Then convert that money to: • A Roth 401(k) (if offered) or • A Roth IRA (if in‑service withdrawals are allowed) This is how high earners move tens of thousands into Roth every year. Please know TSP plans currently do not allow 415c aftertax contributions --- Example (Age 49, $150,000 salary) • $24,500 employee • $4,500 employer match • Total so far: $29,000 415c max $ 72000 Minus $29000 from $72000 = $43000 After‑tax contribution = $43,000 (And all of it can become Roth if your plan allows conversions.) - Example (Age 50 +, $150,000 salary) • $24,500 employee • $4,500 employer match • Total $29,000 415c max is $80000 Minus $29000 from$80000 = $51000 After‑tax contribution = $51000 (And all of it can become Roth if your plan allows conversions.) --- What You MUST Ask HR 1. Do you offer a Roth 401(k)? 2. Do you allow after‑tax contributions? 3. Do you allow in‑plan Roth conversions? 4. Do you allow in‑service withdrawals of after‑tax money? 5. Will catch‑ups still be allowed in 2026 if I am over 50 and made more than $150000 on my w2 at the end of 2025 ? These five answers determine your entire strategy. --- The Suze School Bottom Line 2026 is the year of tax‑free retirement planning. The rules are changing — but they are changing in your favor if you understand them. You want: • Roth whenever possible • After‑tax contributions if allowed and only if Immediate conversion to a Roth if your plan allows • ---

Posted by Suze at 2026-01-04 10:00:03 UTC