{ "media_type": "text", "post_content": "I am just enrolling in 401k, what does it mean to max out 401k contribution? I googled and it says max contribution is 19k, so should I do 19k / my salary and contribute that %?", "post_id": "5f38357f7113690022f8c8fc", "reply_count": 9, "vote_count": 3, "bowl_id": "59064a3cb12379001006592c", "bowl_name": "Personal Investment Chatter" }

I am just enrolling in 401k, what does it mean to max out 401k contribution? I googled and it says max contribution is 19k, so should I do 19k / my salary and contribute that %?

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It’s 19.5k.. if you want to max out 401k for this year then the math is wrong. You only have 4 months left in this year.. so contribute 19.5/(rest of the salary for this year)

likesmart

Depends - read through your company’s plan and see if they do a true up. If they do, contribute as much as you can per paycheck and max it out early. If they don’t, then do the percentage you would need to max it on the last paycheck of the year.

likefunny

This advice is wrong. You are referring to maxing company match, while the question was about maxing allowable contribution, which is 19.5k. he should do whatever % will get him to 19.5k with remaining paychecks of the year

like

If you want to reach target for this year, then just indicate a bigger %. It won’t matter coz as soon as you meet the threshold of 19k, it won’t take additional amount from your salary. Ex, if your monthly income is 6k and you are contributing 30% (~2k) to 401k every month (assumption), after 9 months- you would have countrified 18k, so in the 10th month salary only 1k will go to 401k. Hope it helps!

likesmart

Thank you so much!

Max out could mean 2 things. You make sure you do 100% of your match. Or you max out the total you can contribute

likefunny

Yes, if you want to maximize the contribution. Most people do 5-10%

like

Thank you!!

Do the math and time remaining- most people can’t max out at 19k, and with your timeline you’ll have to put in a hefty contribution to max. My firm will cap the contribution to 30%, while others will allow 100% of your paycheck if you elected to do so. Your company will match you up to a % of your income, so perhaps check on that number to make sure you don’t miss out on any money- the rest is dependent on your financial goals and expenses.

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