Author Topic: Calculating maximum 401k contribution  (Read 1474 times)

Jtrey17

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Calculating maximum 401k contribution
« on: April 25, 2017, 03:56:24 PM »
Hello friends, I need some help understanding the maximum 401k yearly contribution. Does the $18,500 include employer contributions?

Joel

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Re: Calculating maximum 401k contribution
« Reply #1 on: April 25, 2017, 03:59:17 PM »
The employee can only contribute $18,000 per year. It does not include employer contributions or catch-up contributions for those age 50 or older.

MrDelane

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Re: Calculating maximum 401k contribution
« Reply #2 on: April 25, 2017, 03:59:37 PM »
The maximum is $18K (not 18,500), and no it does not include employer matching.


EDITED TO ADD:

DOH!  Joel beat me to it.

Nothlit

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Re: Calculating maximum 401k contribution
« Reply #3 on: April 25, 2017, 06:14:13 PM »
The above responses are correct.

To add a little detail that many are not aware of: the $18,000 limit is for "elective deferrals" only. If your retirement plan has a mandatory contribution component (mine does, but it's a 403b so not sure if the same can apply to a 401k), that mandatory amount does not count against the elective deferral limit. As a result, I will end up contributing about $20,500 to my 403b this year, in addition to my employer's contributions of about $13,000.

Edit to add: The first comment here explains the details behind this nuance, in case anyone is curious.
« Last Edit: April 25, 2017, 06:17:46 PM by Nothlit »

MrDelane

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Re: Calculating maximum 401k contribution
« Reply #4 on: April 25, 2017, 07:10:21 PM »
I will end up contributing about $20,500 to my 403b this year, in addition to my employer's contributions of about $13,000.

I'm not adding anything useful to the thread...just wanted to say WOW, that's fantastic.
I wish I could get that level of matching.