After-Tax Spillover for 401(k)

 

Are you affected by the IRS limit on combined pre-tax and/or Roth after-tax contribution to the Farm Credit Foundations 401(k) plan? Then the after-tax auto spillover feature could be just for you.

No more monitoring your pay checks to see when you reach the limit. With the after-tax spillover feature, just make one election to automatically switch your contributions every year to traditional after-tax when you reach the IRS limit. Your election will continue year after year, subject to other IRS limitations, unless you make a contribution rate change.

The maximum amount you can contribute into your 401(k) for 2012 is $17,000, plus an additional $5,500 catch-up, if you are age 50 or over at any time during the year. If you ever reach that limit, your pre-tax and/or after-tax Roth contributions are automatically suspended and you will no longer receive the employer match.

To keep receiving your employer match for the rest of the year, you can make after-tax contributions by using the after-tax spillover feature or enrolling in after-tax contributions. Therefore, you will receive the maximum employer match if you continue to contribute at least 6%.

 

How to Enroll

You can enroll in the after-tax spillover by logging into your account on www.mylife.newyorklife.com  and go to the Contribution Rate Change menu under the Manage My Account tab.  You can also call New York Life at 1-800-294-3575.