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Fully Vested!

May 4th, 2021 at 03:42 pm

This morning, as I was doing my daily morning check-in of all of my financial apps, I was excited to see that I am now fully vested in my 401k.  I expected it this month, but the work anniversary that triggers it isn't technically until the 20th.

My 401k plan is on a 4 year vesting schedule.  The match is 50% of the first 6%.  I've always contributed more than enough to get the full match. 

Mulling over my strategy for increasing retirement original plan was to just keep increasing contributions as able, but now I am toying with the idea of opening an IRA, and maxing that before going back to the 401k.  Right now I am not eligible to deduct Trad, and am still under the income limits for Roth (which is appealing to diversify taxable status in retirement), but expect that to change in the next five years or so (fingers crossed anyway).  I need to do some more research on what the best plan is.  If I open a Roth, I would keep contributing there until no longer eligible, then start contributing to Trad and backdoor it to Roth.  My only concern is that if I ever need to roll a 401k over, it would go into Trad and then give me trouble with backdooring.  I think.  Unless I can roll it into a new company's 401k, and then no issues.  I think for backdooring to work optimally long term, you need to have zero in Trad, and use it as a holding zone before converting, otherwise the pro-rata rule comes into play.  Do I have that right? 

In an ideal world I would be maxing 401k, and maxing IRA, but I am not there yet.  For now, being vested doesn't really change anything about my financial picture, but ensures that if I were to change jobs, I get to take the full amount of my match with me when I go.  

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