Question for those of you who max out your IRS contribution for a tax-differed 401k: what happens after you have hit the contribution limit? Do you still get matching if you can no longer contribute?

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I’d like to max out my 401k this year, but I’m not sure how this works.

If you hit the contribution limit in June for instance, can you continue to contribute to get the match?

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Idk about Accenture, but D gives their match annually so it doesn’t particularly matter when you contribute

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You cannot contribute past limits. At D the plan admin will just stop all deductions on you hit the max

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I was thinking about putting 50% of my paycheck into 401k for about 10 paychecks and then going 6% the rest of the year. I make $80k right now. Is this a sensible strategy?

Email and ask your benefits team. Last year at Slalom I hit max around May so no match from May-Dec. They automatically performed a true up in Q1 of the following year so all match was received, albeit later

Some employers do a match on a paycheck per paycheck basis. In that case your strategy would not be optimal if there is a max match per paycheck

D2 - that wasn't the question. OP - it depends on plan rules. Some plans are setup so you would indeed lose match dollars in the second half of the year. Others are similar but have a "true up" contribution in Dec to make you whole. Of course your lose the true up if you leave before then. The safest bet is to set your 401k so it's evenly spread over the year.

^what BCG1 said - that’s my strategy

At PwC we lose the match if we max out early...for example, I missed out on the match for Nov-Dec because I didn’t bother readjusting my contribution rate to account for my large bonus.

At Accenture they will true you up to $18k match but you cannot contribute more. Unless you are considering the new 10k allowance. But you should just set up a separate IRA in that case.

A1 - so that means, with an 80k salary, if I meet the limit in June and then cease contributions for the rest of the year, I will still get .06*80 = 4.8k in matching even though I had no contributions in any pay period from June to Dec?

I will confirm with benefits center, but is my understanding correct?

Ours happens in Feb and is based on total contributions made the previous calendar year, so doesn't matter whether you've maxed out early or spread it out perfectly.

Once you hit the limit you can’t put more in and your take home will be bigger for a few pay periods. Happens every year when I go over bc it bonus

OP - forget the .06*80.... You are basically attempting to contribute 18k by June. So they will match up to 6% through June. Then any gap between what they matched and 18k, they will true up. That makes sense?

This is my understanding:

If contribution limit is met, then total match = 6% of salary. Salary = 80. Total match = .06 * 80 = 4.8.

Match Jan - June 1 = 11 * (80000/24) * .06 = 2200. True up = total match - (match Jan - June 1). True up = 4.8k - 2.2k = 2.6k.

So if I max out in June, I will get 18.5k in contributions + 2.2k in matching. Then in Q1 2019, I will get 2.6k in matching deposited to my account.

So it sounds like the strategy outlined by BCG1 is clearly better because the true up is not invested in anything from June to Q1 of 2019 (assuming market appreciation).

Actually no, that ignores the potential appreciation of the contributions themselves, which would outweigh the true-up. The right decision will depend on market return and if/when you leave the firm

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