Author Topic: 401k Job Switch Question  (Read 1442 times)

Platypuses

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401k Job Switch Question
« on: January 30, 2019, 08:48:36 AM »
What happens to matching contributions if I hit the max 401k contribution ($19000) in 2019, then switch jobs? Will I be able to contribute to the new companies 401k enough to get the match, and then refund my overage come tax time?

I want to max out my 401k early because I might not go back to work for the rest of the year, however if I do find a new job I don't want to lose the potential match of the new company.
The company I currently am at has a "true up" option so I will continue to get the match once I have maxed out 401k if I continue to work here.   

Thanks!

chasesfish

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Re: 401k Job Switch Question
« Reply #1 on: January 30, 2019, 09:49:52 AM »
I hate to respond with "ask your accountant", but I would probably just fund the $19,000 in employer #1's 401k and not fund hypothetical employer #2's 401k until 2020.  Many employers have a waiting period before they'll match anyways.

The paperwork of handling the refund wouldn't be worth the irritation to me.  Just my opinion, I could be wrong

walkwalkwalk

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Re: 401k Job Switch Question
« Reply #2 on: January 30, 2019, 09:58:12 AM »
There are IRS penalties for over-contributing and some employers don't even allow you to contribute to a 401(k) until 6 months in anyway, so it may be a moot point. So either don't contribute to the new plan, or leave yourself enough room to get the match from the new employer (if you think you'll have a new employer that will allow you to contribute in 2019).