Hello! I recently set up a 401k through my business. And rookie mistake learned that I needed to fund it before Dec 31 (technically I had to fund within 7 days) through the business. Now I need to fund $27k (bc of 3%match) this month.
Don’t want to use all my cash, but is it worth selling from brokerage to fund 401k to max it out? (Btw-457 is fully funded as well) won’t I pay cap gains (I’d be using my long term funds) but still…
Advice?
Hi Jessica,
I’m not actually familiar with the requirement to fund your 401k as you described, but in general I’d say “yes” it’s worth it to sell the funds from your brokerage account. Those capital gains are going to be taxed some day no matter what. So getting them out of the way today and having that $27K get into a tax-break, tax-deferred situation will definitely save you a lot on your tax bill.
But with all things taxes it can be complicated so you might want to run this by your tax professional or CPA!
Jeremy
Thanks that’s helpful! I did run it by my tax person, but I guess needed the affirmative from this community! Haha thanks so much!