EY is paying out bonuses on 7/30/21. Should I change my 401k contributions to 0% now so that by 7/30 I’ll get my full bonus amount or should I do the right thing and contribute to my retirement?

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Do the right thing

likefunny

Retirement

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You're 401k works hard for you all year. Doesn't it deserve a bonus too? ;)

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It depends on the plan document, some have bonus included in comp, some do not. It also depends if you max, and if they true up anybody who maxes early - if they don't true up the match, you want to make sure you don't max until the final paycheck

likefunny

EY trues up the match. That is a great point that many miss

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Are you going to max the 401k for the year without the bonus? If so it doesn’t matter.

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Unless you needed that specific money, why get taxed more when you can get taxed less?

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Unless you invest the tax savings, Roth is probably better for most, but that is a completely different discussion

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Hmmm I didn't realize bonuses go into 401k. I've set my contribution to hit almost exactly the yearly maximum based on base salary. Does this mean I'll be going over unless I reduce my contribution at some point this year? Does that even matter since EY does the true-up?

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Once you max out your contribution it stops. I usually get a couple nice fat paychecks at the end of the year since I hit my max in Nov.

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Do the right thing !

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