Profit Sharing Predictions
01-05-2017, 04:12 PM
#21
Gets Weekends Off
Joined APC: May 2009
Position: The GF of FUPM
Posts: 3,073
01-05-2017, 04:55 PM
#22
Gets Weekends Off
Joined APC: Mar 2006
Position: guppy CA
Posts: 5,171
For the 401k, you just call up Schwab and they'll send you a form to fill out. Then mail it back to them. Takes a few weeks but it's just filling out a form. Make sure you tell them you want to convert your post-tax contributions to Roth.
There is no direct way to have post-tax go to a Roth - which would be logical.
You can also convert any other taxable contributions, such as A, B contributions, vacation forfeiture, etc to Roth. However, those will be taxable in the year you convert them.
I plan on converting all of my pretax contributions over to Roth after I retire and am in a lower tax bracket.
The two previous posts refer to IRAs; I'm specifically referring to converting 401k funds to Roth.
There is no direct way to have post-tax go to a Roth - which would be logical.
You can also convert any other taxable contributions, such as A, B contributions, vacation forfeiture, etc to Roth. However, those will be taxable in the year you convert them.
I plan on converting all of my pretax contributions over to Roth after I retire and am in a lower tax bracket.
The two previous posts refer to IRAs; I'm specifically referring to converting 401k funds to Roth.
01-05-2017, 04:56 PM
#23
Gets Weekends Off
Joined APC: Mar 2005
Posts: 398
Google: backdoor Roth.
It's a moderately complex topic. Personally, I just learned about this technique. From what I can tell it really benefits 2 types of folks. First those who want to save more for retirement than their plan allows or second those with an enormous amount of cash on the sides that they'd like to shelter from tax.
The way over simplified version is this . . . first, you need a single standard IRA at Schwab with no other old IRAs that have a value much larger than the one at Schwab. Second, you fund the IRA with after tax money and tell Schwab you want to change it to a Roth, but there is some question about how long you need to wait between funding and switching.
Like I said it's complicated; just like everything else with our crazy tax code
It's a moderately complex topic. Personally, I just learned about this technique. From what I can tell it really benefits 2 types of folks. First those who want to save more for retirement than their plan allows or second those with an enormous amount of cash on the sides that they'd like to shelter from tax.
The way over simplified version is this . . . first, you need a single standard IRA at Schwab with no other old IRAs that have a value much larger than the one at Schwab. Second, you fund the IRA with after tax money and tell Schwab you want to change it to a Roth, but there is some question about how long you need to wait between funding and switching.
Like I said it's complicated; just like everything else with our crazy tax code
I'm well aware of the backdoor Roth using an IRA, but Andy's post made it look like he did the transaction inside our PRAP by designating post-tax PRAP contributions.
Originally Posted by Andy
I also converted all of my post tax contributions to Roth 401k so that the money grows tax free. It's a bit of a hassle to do with Schwab but I don't want to pay taxes in the future on gains that could be tax free with a simple conversion. Since the money I converted was post-tax, there is no additional taxes for conversion (other than taxes on gains prior to conversion).
Last edited by jumppilot; 01-05-2017 at 04:58 PM. Reason: I quoted the wrong person
01-05-2017, 05:00 PM
#24
Gets Weekends Off
Joined APC: Mar 2005
Posts: 398
For the 401k, you just call up Schwab and they'll send you a form to fill out. Then mail it back to them. Takes a few weeks but it's just filling out a form. Make sure you tell them you want to convert your post-tax contributions to Roth.
There is no direct way to have post-tax go to a Roth - which would be logical.
You can also convert any other taxable contributions, such as A, B contributions, vacation forfeiture, etc to Roth. However, those will be taxable in the year you convert them.
I plan on converting all of my pretax contributions over to Roth after I retire and am in a lower tax bracket.
The two previous posts refer to IRAs; I'm specifically referring to converting 401k funds to Roth.
There is no direct way to have post-tax go to a Roth - which would be logical.
You can also convert any other taxable contributions, such as A, B contributions, vacation forfeiture, etc to Roth. However, those will be taxable in the year you convert them.
I plan on converting all of my pretax contributions over to Roth after I retire and am in a lower tax bracket.
The two previous posts refer to IRAs; I'm specifically referring to converting 401k funds to Roth.
01-06-2017, 04:12 AM
#27
Don't say Guppy
Joined APC: Dec 2010
Position: Guppy driver
Posts: 1,926
I think the RHA could be a good deal for a lot of folks, but the structure and management of it scares me. Probably the same clowns that managed our A-fund, and were looking for work.
01-06-2017, 07:04 AM
#28
Line Holder
Joined APC: Dec 2010
Position: 2172
Posts: 44
Remember, PS is a percentage of the company's profit, not a percentage of your W2.
I would venture to say most every pilot made significantly more this year than last year, so in order to have the percent of your W2 remain near 13 or so, the company would also have to have made significantly more.
The collective pilot's pool of profit sharing is calculated off of the company's profit. Then it is divided amongst the pilots using a percentage of your W2.
I don't know what the company made. But if it is similar to last year, and you made more than last year, then your percent of W2 would be less. Another way to say it is, if the company made the same as last year, then your amount in dollars will be the same as last year.
I would venture to say most every pilot made significantly more this year than last year, so in order to have the percent of your W2 remain near 13 or so, the company would also have to have made significantly more.
The collective pilot's pool of profit sharing is calculated off of the company's profit. Then it is divided amongst the pilots using a percentage of your W2.
I don't know what the company made. But if it is similar to last year, and you made more than last year, then your percent of W2 would be less. Another way to say it is, if the company made the same as last year, then your amount in dollars will be the same as last year.
01-06-2017, 07:23 AM
#29
Banned
Joined APC: Jun 2008
Position: A320 Cap
Posts: 2,282
Remember, PS is a percentage of the company's profit, not a percentage of your W2.
I would venture to say most every pilot made significantly more this year than last year, so in order to have the percent of your W2 remain near 13 or so, the company would also have to have made significantly more.
The collective pilot's pool of profit sharing is calculated off of the company's profit. Then it is divided amongst the pilots using a percentage of your W2.
I don't know what the company made. But if it is similar to last year, and you made more than last year, then your percent of W2 would be less. Another way to say it is, if the company made the same as last year, then your amount in dollars will be the same as last year.
I would venture to say most every pilot made significantly more this year than last year, so in order to have the percent of your W2 remain near 13 or so, the company would also have to have made significantly more.
The collective pilot's pool of profit sharing is calculated off of the company's profit. Then it is divided amongst the pilots using a percentage of your W2.
I don't know what the company made. But if it is similar to last year, and you made more than last year, then your percent of W2 would be less. Another way to say it is, if the company made the same as last year, then your amount in dollars will be the same as last year.
01-06-2017, 08:03 AM
#30
Gets Weekends Off
Joined APC: Nov 2009
Posts: 5,265
Remember, PS is a percentage of the company's profit, not a percentage of your W2.
I would venture to say most every pilot made significantly more this year than last year, so in order to have the percent of your W2 remain near 13 or so, the company would also have to have made significantly more.
The collective pilot's pool of profit sharing is calculated off of the company's profit. Then it is divided amongst the pilots using a percentage of your W2.
I don't know what the company made. But if it is similar to last year, and you made more than last year, then your percent of W2 would be less. Another way to say it is, if the company made the same as last year, then your amount in dollars will be the same as last year.
I would venture to say most every pilot made significantly more this year than last year, so in order to have the percent of your W2 remain near 13 or so, the company would also have to have made significantly more.
The collective pilot's pool of profit sharing is calculated off of the company's profit. Then it is divided amongst the pilots using a percentage of your W2.
I don't know what the company made. But if it is similar to last year, and you made more than last year, then your percent of W2 would be less. Another way to say it is, if the company made the same as last year, then your amount in dollars will be the same as last year.
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