My company currently doesn't offer a 401k match. I am contributing the max, $18000/year. My wife and I, age 36, are in the 28% tax bracket right now, and in a year we will be in the 39.6% bracket when she finishes medical residency, meaning that other tax advantaged savings plans (IRAs, etc) are gone for us.
I'm thinking if I take a pay cut right now it will put me below the "highly compensated employee" mark ($115k), and then I could ask my employer to pay me a 100% match instead, another $18k/year, in the 401k. This wouldn't be "free" money, as it would be cut from my regular pay, but it wouldn't be taxable income in the highest marginal rate.
The pro: tax savings of $5000-$7000/year
The con: this retirement money is 24 years away and technically will not help our early retirement.
thoughts? If I need to incentivize my employer to undergo the hassle of doing this, is it worth me taking an "real" paycut, for instance reduce my total compensation by $20,000 in order to get $18,000 in 401k match?