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They should true up match at year end
18,500/# of pay periods in year
The 18500 is your limit - firm match doesn’t count against that. You contribute 18500 you will still get employe contribution
You have to elect to contribute a PERCENTAGE of your salary, not the actual dollar amount
I don’t want to deal with the after-tax 401k. They make it simple with the HSA contribution and show you the max you can contribute for that but it’s a lot more difficult choosing a percentage for the year especially when bonuses get involved. #firstworldproblems
PwC only matches 25% up to 6% contribution. You’re well maxed out on employee match if you’re hitting 18,500
P.S. Firm does not tell you this but the firm match is based on the firm fiscal year not Jan. to Dec. If you max before end of June you don't get any firm match .... at least that's what my statements showed.
I think OP is thinking the 18.5k limit is for OP and employer match which is not correct. OP the 18.5 is limit for your contribution and your employer match does not count toward 18.5k limit. As for your monthly contribution percentage divide 18.5 by your base and it will give you the monthly percentage to max out 401k. You will have to change the contribution percentage once bonus and raises becomes effective otherwise you will max out of 401k a little early. Another thing is that your 401k contribution will stop once your hit the limit for year.
At EY, if you do not contribute every pay period, you will lose a part of the match. They only match per pay period, with no trueup to take into account people who maxed out earlier in the year. We have to actively manage our percentage deferral several time throughout the year to ensure we don't contribute too much prior to December 31.
No firm should require you to turn off contributions when you hit the annual max. That's usually programmed into the payroll system and will stop deductions when you hit the max.
A group of accountants seriously can’t figure out how to contribute exactly $18,500 to an account across 24 pay periods? Come on guys. You are better than this.
ITS A PERCENTAGE ^
PwC won’t continue matching your account if you hit 18,500 before 12/31. Hence the whole detailed explanation in the materials. It shows how by contributing less, in some situations, you end up with more “free money” from the firm because you don’t max out prior to 12/31. If you did max say in October there would be no match for the rest of the year and all your other contributions would move to be after tax not before in the Roth plan
Aren't you able to go online and change the percentages yourself? It generally only takes a week to go into effect. Calculate the percentage to contribute at the beginning of the year then again when you get your raise. Your last paycheck will have a smaller contribution but the 401k will automatically not allow you to go over $18500 in contributions so it will cap the last paycheck deduction.
(18,500-Amt paid so far this year)/# remaining pay periods in year
Why would you not get the match if you max out early?
Yes. There is an option you can select that will turn off the contributions once you hit the ceiling.
I’m fairly certain it is not based on Firm year but rather tax year. Every example they provide is as of dec for match calculation regarding losing it or not by how much is contributed
Do you really not get all of the company match if you max out early?
EY2, that makes no sense. Why do you have to manage it to get the match? Why would contributing an even % cause you to lose the match? If the match is up to 6%, are you people making more than 300k? I don’t get the angst over this
Just do the math like has already been said. But to add, if your bonuses and raises don't coincide with the plan year then make sure you recalc after those events and change your rate for the rest of the year.