I am switching Jobs and will be eligible to participate in my new employers 401(k) plan for about 4 pay cycles (paid twice a month) prior to the end the year. Any contributions I make will be subject to a 6% employer match. Here's the catch: I have already maxed-out my personal contributions to my current 401(k) plan.
I did some research, and it appears there is no penalty for over contributing to a 401(k) plan so long as you correct the issue prior to April 15 of the subsequent year (understanding that I will have to pay normal taxes on the excess amount).
I would love to contribute what I can to my new employer's plan, receive the match, and then correct for my excess contribution following the end of the year. My current 401(k) is with Vanguard and the new 401(k) will be with Fidelity, so I don't think Fidelity will automatically stop me from over contributing.
Any reason that this is not possible or that I shouldn't take advantage of this situation?
Thanks,
Eric