Company 401K or tax time deduction?
I am currently a contract employee. My company will be offering a 401K plan in Jan 2016.  There will be matching but only if employees are on the books in Dec 2016.  I do not plan to be a contract employee at that time.  So is it a better strategy to make employee contributions to the company 401K or just wait until tax time and send money to my existing 401K plans and deduct from my earnings?   I am 55 and actually plan to send the maximum allowance to my personal retirement account, but is there any benefit to run the money through payroll to the company 401K?




That is a great question and one that I have passed over to our financial specialists. They will be reaching out to assist. Thank you.




Here is the response from our Financial Improvement Team:


Congratulations on being in a position to save for your retirement and for wanting to take advantage of your employer’s matching contribution.

  • Although there are many types of retirement plans available, we encourage folks to take advantage of the free money from an employer provided matching plan whenever possible.
  • It’s also important to understand all of the facts surrounding an employer provided plan regarding not only the amount of the employer match, but also the rules for eligibility to start into and exit from the plan.
  • Individual retirement accounts, such as IRA’s, may be suitable as well, depending on how much you want to contribute, and whether you can deduct the full amount of the contribution based on IRS rules.

Because of the many options and timing involved in making a retirement contribution choice, it’s important to speak with your employer about their plan benefits, your tax advisor, and a USAA advisor (who has already emailed you directly) to review your situation.


Thank you, Happy Holidays!