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Simple 401k question

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  • Simple 401k question

    I have a relatively simple question; I think. I couldn't find the direct answer on a quick Google search so I've turned here.

    Next month I will be receving my bonus from work since I've met all of my goals this year. An email went out stating we can contribute 1-100% of this bonus into our 401k plan. I also have the option of having the bonus before or after Tax as a supplemental contribution.

    My question is:
    If I submit all 100% of my bonus into my 401K, when I do decide to withdraw the money way down the road would it be taxed at the same amount as my normal withdrawl or does it get taxed at a different rate? Also, I'm sure they keep track of the amout we opt to contribute so I'm thinking it's different tax amounts.

    Thank you!

  • #2
    Originally posted by KevinNJ25 View Post
    I have a relatively simple question; I think. I couldn't find the direct answer on a quick Google search so I've turned here.

    Next month I will be receving my bonus from work since I've met all of my goals this year. An email went out stating we can contribute 1-100% of this bonus into our 401k plan. I also have the option of having the bonus before or after Tax as a supplemental contribution.

    My question is:
    If I submit all 100% of my bonus into my 401K, when I do decide to withdraw the money way down the road would it be taxed at the same amount as my normal withdrawl or does it get taxed at a different rate? Also, I'm sure they keep track of the amout we opt to contribute so I'm thinking it's different tax amounts.

    Thank you!
    I'm assuming that you contribute to a standard (pre-tax) 401k, in this case you will pay taxes equal to the standard income tax for your tax bracket at the time of the withdrawal. So if you retire and live off of 30K a year your taxes on the contribution would be equal to income tax on 30K of income at that time. Just like you would pay it if you were still working.

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