Maxed out 401k already

[felizcortez]

I hit the $18k 401k contribution limit already in only 3 paychecks this year (a new record for me since it normally takes 4-6 months).  We just had a large profit sharing payout and I put the maximum contribution percentage into the account (50%).  I still get the match put in throughout the year, but it is nice to have my contributions out of the way.  Also already funded IRA's for 2016 for both my wife and I this year with some excess cash and will continue to make contributions to the after tax vanguard accounts. HSA contributions are happening on a per paycheck basis and those are spread out through the year since that is done by a dollar amount each paycheck instead of a percentage.
 

[GrowingTheGreen]

That's awesome.

The question now is what are you going to do? I'm guessing fund a taxable account?

[felizcortez]

That's awesome.

The question now is what are you going to do? I'm guessing fund a taxable account?

Yes.  I will be continuing to fund my taxable vanguard account.  I've been trying to front load all of the tax advantaged accounts to get money into the market as soon as possible. 

I've also been buying ESPP through work at a 15% discount and selling immediately to diversify into index funds. 

[Eric]

This should be in the Share Your Badassity section!  :)

[pdxvandal]

Nice work! I maxed my 401k for the first time last year ... in just 7 months. Two months is quite impressive. I'm just DCA'ing throughout 2016 as it's too much paperwork/bureaucracy to change contribution amounts.

[felizcortez]

Nice work! I maxed my 401k for the first time last year ... in just 7 months. Two months is quite impressive. I'm just DCA'ing throughout 2016 as it's too much paperwork/bureaucracy to change contribution amounts.

It's pretty simple where I work.  You just log in and say what percentage you want to contribute.  When the profit sharing check comes out there are always instructions about how to change your contribution amount so that you don't deposit more than you wanted to in your 401k.  Then there are instructions that come out later that tell you how to switch it back along with dates.  My reaction was to bump it up to 50% and keep it there.

[PsychoCid]

So after you hit your 18k for the year you have to manually go in and stop diverting cash to 401k?  What happens if you forget, do it late, overpay, how do you get the money out or what kind of penality do you get?

[cheapass]

So after you hit your 18k for the year you have to manually go in and stop diverting cash to 401k?  What happens if you forget, do it late, overpay, how do you get the money out or what kind of penality do you get?

Both my wife's and mine will put a hard stop at 18K so payroll will automatically stop deductions at that point in the year.

[felizcortez]

So after you hit your 18k for the year you have to manually go in and stop diverting cash to 401k?  What happens if you forget, do it late, overpay, how do you get the money out or what kind of penality do you get?

At my company you don't have to do anything.  The contributions automatically stop once you hit the 18k limit.  So if you put your contribution amount to 50% you'd put 50% of every paycheck in the 401k until you hit the 18k for the calendar year. After hitting this limit, the contributions would automatically go to zero.  Starting the next calendar year you'd start making 50% contributions again.

It may be different where you work.

Our HSA's work differently where you have to keep track if you went over by contributing after tax dollars to the account. 

[Alternatepriorities]

So after you hit your 18k for the year you have to manually go in and stop diverting cash to 401k?  What happens if you forget, do it late, overpay, how do you get the money out or what kind of penality do you get?

My wife's employer had an accounting error and put too much into her 403B last year... The caught it when they went to file with the IRS and they are sending her a check for the difference minus a percentage they send to the IRS based on estimated taxes. I expect they would do the same thing with a 401k account.

[PsychoCid]

Cool, thanks.  I was just doing the match amount at my old company but will be starting a new gig soon and plan to max that puppy out.

[Alternatepriorities]

Cool, thanks.  I was just doing the match amount at my old company but will be starting a new gig soon and plan to max that puppy out.

I'd just do the math when you switch and then set your new 401k to finish out the year at max including the old job's contributions. The reset it again next year. Why give them an interest free loan and deal with the paperwork later?

[use2betrix]

I would love to do that but unfortunately I don't get my company match if I don't put in 5%. Right now they are putting in nearly $750/mo that's fully vested so that's worth not maxing out early.

Right now I've been putting in 18% so far this year, next month I'll need to switch to 5% to get their full match for the remainder of the year without going over.

[marblejane]

Whoa, this thread is inspirational! I just bumped my contribution percentage from 40% to 50% (max allowed by my employer). Kudos to you, sir.