{ "media_type": "text", "post_content": "I’m eligible for 401k %match from my employer on aug 1 2021. The max total amount I could get from them for 2021 is ~$420. I plan on maxing out & my 401k has an aggressive strategy. Would you wait to contribute until later in the year in order to maximize the match, or invest early in the year for the compound interest gains? Am I wrong to think the latter?", "post_id": "5fed05cb774ce700287321b0", "reply_count": 12, "vote_count": 0, "bowl_id": "59064a3cb12379001006592c", "bowl_name": "Personal Investment Chatter" }

I’m eligible for 401k %match from my employer on aug 1 2021. The max total amount I could get from them for 2021 is ~$420. I plan on maxing out & my 401k has an aggressive strategy. Would you wait to contribute until later in the year in order to maximize the match, or invest early in the year for the compound interest gains? Am I wrong to think the latter?

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You definitely don't want to leave any match off the table. Be 100% sure what your plan rules are on the match, and whether they auto match 5% comp per pay regardless of if you contribute or not (which means you can front load)...or if they only match your contribution per pay (which means you have to space out the 19500 throughout entire year. The match is the only guaranteed return you'll ever have in the market. Let's say you make 100k, that means full company match of 5% will be 5k. That's a 25% return on 19500. Don't count on the market giving a better return than that just b/c you wanted to front load.

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This is a great way to think about it - thank you!! Going to plan it out so that I can max it out

Obviously can’t know what the market will do, but just want to check for flaws in my logic at a high level!

There may be limits on how much you can contribute each pay period? You would have to look at the plan documents to tell. I don’t know that there is anything wrong with you plan if you can do it. I would probably just contribute throughout the year. You won’t know until the end of the year if you chose right and that would just be good or bad luck.

Thanks for the input - I guess it’s a toss up and hopefully won’t make too much of a difference either way

Only $420?? Or per pay period? That’s so low. If the former just max out as fast as you can.

You should check any information you have to get specifics there may be limits per pay period and you want to make sure they catch up if you max out early

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