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Highly compensated employees may not be able to contribute the maximum amounts to their 401(k)
For those individuals making more than $130,000 a year that raise you got might complicate saving for retirement. If you are a highly compensated employee (HCE), your maximum contribution limits to a tax-deferred retirement plan are tied to the participation rates of other employees in the company. But there are workarounds such as the purchase of life insurance or setting up a nondeductible IRA that can eventually be rolled into a “backdoor” Roth IRA. In Andrew Osterland’s article for CNBC, he reviews the options open for highly compensated employees. Read Mr. Osterland’s article here…
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