Should I increase my monthly percentage into my Roth 401(k) for the remainder of the year?

I've recently maxed out my Roth IRA at $5,500 for my 2018 contributions. I also contribute 6 percent with a 4 percent company match into my Roth 401(k). I am conflicted as to whether or not I should increase my monthly percentage into my Roth 401(k) for the remainder of the year. Alternatively, should I save the additional after-tax cash in a high interest savings account as a cushion to contribute and max out my 2019 Roth IRA contributions?

Banking, IRAs, Taxes
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4 weeks ago

Hello,

When you can max out Roth 401k, it’s equivalent to enhance your future Roth IRA as all Roth 401k can be directly rolled over to the Roth IRA.  Unless you’re an early Roth IRA contributor, I’d say go and max out this year’s $18,500 Roth 401k.  Meanwhile, reviewing your budget to see if there’s any opportunity to save extra for 2019 Roth IRA.

I’m very pleased to see your dedication for saving, so I only have one extra tip to offer, which is to save up your emergency fund.  It should be 12 months of living expenses for a single, or 6 months for a married couple.  Once you have that extra cushion for contingencies, you are financially disciplined to stick to your saving plans and weather through any volatile stock market.  Cheers!

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