401(k) contribution limits this year are $22.5k to age 50, and $30k for age 50 and above.
We also have the option of whether we make contributions on a pre-tax or post-tax basis.
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Bonuses are supposed to be taxed at the supplemental withholding rate regardless of the marginal tax bracket they will actually end up in, which in 2023 is 22%ā¦.geez, how much is your state and local withholding??
ETA I googled it and apparently thatās not the only way to tax bonuses, itās just how all the companies Iāve worked for have done it and it seems to be the most common. TIL.
Iām not sure to be honest, I feel like my bonus always has a crazy withholding. I definitely donāt pay 45% average tax rate, more like 22% all in (ground up), I think.
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Is it all withholding, or is some of the chunk being taken out due to 401k contributions or something? I feel like my bonuses usually net around 55%, but thatās because of my 401k contribution taking out a lot.
I worked for a company once that didnāt automatically take anything out of your bonus for 401k purposes. I didnāt realize it until my bonus was way higher than Iād expected. Only worked there briefly.
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Oh thatās a good point, 44.5% isnāt tax withholding thatās just 1 - bank account number over gross number, so thatāll include 401k, etc.
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Another poster mentions the current 401k plan limits. Thatās by far the most common type of deferred compensation plan in the US.
Some companies also offer non-qualified deferred compensation plans. These can be free of contribution limits. However, non qualified plans come with additional risk as in the event of a company bankruptcy they are at risk. I participated in a non qualified plan.
In the US the limit is $22.5K per year into your 401k. or 30k if you are over age 50.
Sorry, M_S got you the correct answer before me. Call me Mr Redundancy and Mr Repetitive.
Regarding bonus withholding ā I just pulled up the pay statement for my bonus.
Withheld were:
- Federal Income tax (@22%)
- Medicare (@1.45%)
- Social Security (@6.2%)
- State taxes
My current employer doesnāt do 401(k) withholding from bonus checks. At prior employers, bonuses werenāt significant enough (either by company pay policy, or because I was too junior at the time) for me to notice.
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Asking for a friend.
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Some companies allow bonus receivers to manually select the tax withholding percentage so that they may match the marginal tax rate that the bonus puts them into.
I would have thought 250 is like base for an actuary VP. Chief actuary at least 300s imo.
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The VP bit would depend on the company, I think. My current employer is extremely stingy with the VP titles (āVP of actuarialā is the chief actuary). However several years ago I worked at one company where I was surprised the business card printers didnāt wear out the worldās supply of "V"s and "P"s.
I see this as well. VP means very different things in different places. At my current company there is only a single VP position, which is technically the general manager/ceo-equivalent of the insurance company. The āpresidentā technically works for the parent federation and is not an employee of the insurer.
Meaningless really at most companies.
Corporate title inflation is very real.
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Agreed.
Directors/managers without direct reports are already in the 150-200k range
VP with 10-25 reports are probably in the 250-400k range
Most chief actuaries are at the VP level
Few are at the SVP/EVP level. If they have 100+ reports then they can expect closer to 7 figures
woah 10-25? I was thinking like, 4 tops.
usually VPs have 3-6 direct reports (manager/director level)
Their direct reports have 2-5 analysts under them
Just realizing the percentages donāt total to 100%. O_o
Well, only about 46% of Americans understand fractions and percentages. The other 2/3 donāt.
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Given that Americans are probably 13% bigger on average, I think that math checks out.