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Cheaper2000 t1_j2cv0qj wrote

Reply to comment by emmyloo22 in Please help — I don’t understand my pension… can somebody ELI5?? by emmyloo22

Employers do set the limits for 401a plans so looks like I was wrong and you won’t be able to adjust the contribution. Start with an IRA (through any financial company) and contribute as much there as you can (up to 6500/yr).

I’m not actually sure if you’d be able to contribute to retirement beyond the IRA through tax advantaged accounts, that’s a question for HR or somebody with more financial literacy than myself.

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emmyloo22 OP t1_j2cvt04 wrote

Okay, yeah, that stinks a little! Was hoping to put it in the 401(a) and just let it do its thing lol. Would you recommend a Roth or Traditional IRA? I don’t feel like my salary will get much higher than it is now tbh. I really lucked out with this last promotion — I think I’ve already hit a lofty ceiling for my line of work.

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Cheaper2000 t1_j2cw5sc wrote

Roth if you’re under 30. Give it a few years to make the call on whether or not you’ll make more in retirement and then switch to traditional if appropriate. Plus it allows you to contribute “more” since you paid the taxes already (6500 post tax>6500 pre tax).

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emmyloo22 OP t1_j2cwapr wrote

Points taken! You’re killing it with the advice, man. :) Thanks a billion.

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