Anyone ever temporarily lower 401K contribution to increase bonus cash payout?

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Yes, when the paycheck with bonus pay out comes, I reduce my 401k contribution. Once I’m paid out, I go back to my normal %

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What's the rationale behind doing this?

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Doesn’t matter if you’re contributing to the max limits.

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It matters for timing. I don’t want an usually large contribution being applied at an otherwise random market time so I lower it to make the dollar cost average the same

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Accenture has been tempting me by sending repeated emails reminding us to check out 401 contributions because they’re applied to bonuses. Bastards

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At most firms you elect a different % for pay outside of your salary.

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^maybe that's why they send all the emails about it haha

helpful

Your future self will love your current self for contributing your bonus to your 401k. Everyone’s financial profile is different, but an amazing goal is to max it out at $18.5k at which point the contribution is automatically stopped.

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Yes I change it every time. I still max out my 401k in the year so I’m not missing any match or total contribution. Pretty sure that the tax on it makes it a wash, but I get the cash earlier in the year as opposed to once I max out.

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Whaaaat?

Huron is the same.. I don’t change it but I’ve thought about it

Same question could apply to paycheck, right OP? 401k election is just a function of targeted savings level

Always

Just because you’re doing 18.5 doesn’t mean you can’t lose out on some match. Unless your firm does an end of year true up, setting bonus 401k to 0 will forfeit some match

At PwC I continue after tax if I max out early do that I get the match.

I stopped it because I thought I’d miss out on PwC match because the bonus contribution would put me at 18.5 before the end of the year. Maybe I misunderstood

Don’t do it. Buy the dip!

Are you not maxing your 401k with regular comp?

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