I've always read about the lucky ones that can contribute after-tax to their 401k above the 18k limit (I can never think of the appropriate name). I'm fairly certain my 401k does not have that option. DH just started a new job and in setting up his account I was poking through some of the documents. Did we finally get a 401k plan compatible with the extra contributions I've always read about?! If so, anything I should be aware of to navigate this? The company match is 6% on 8% contributions on a per pay period basis. So I imagine I must always be able to have 8% towards the pre-tax portion. That's about it. This is what the "Plan Contributions" section says. If I'm reading it correctly I can put up to 30k towards the after tax portion. 53k-18k(401k)-5k(match)
Am I right? Can I contribute more than 18k?
Any strategies both for 2016 and a full year of work in 2017?
Should I prioritize maxing a Roth IRA or the after tax 401k?
How does a 401k based on percentage of salary get affected by overtime?
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You may save from 1% to 50% of your pay, in 1% increments, on a before-tax basis, after-tax basis, or combination of both up to 50%, subject to the annual maximum IRS contribution limit per year.
You may change your contribution rate at any time.
Contributions will be automatically deducted from your paycheck.
If you reach the before-tax annual limit, in most cases, your contribution will switch to after-tax. Your before-tax contribution election will automatically resume at the beginning of the next year.
If you want to stop contributing or restart contributions, you may do so at any time.
If you do not have an investment election of file, your money will automatically be invested in the Target Date Fund that is closest to your expected year of retirement.
Any changes you make to your contribution percentages will usually take effect within two pay periods, depending on when you make the change.
You may change your contribution rate at any time.
Contributions will be automatically deducted from your paycheck.
If you reach the before-tax annual limit, in most cases, your contribution will switch to after-tax. Your before-tax contribution election will automatically resume at the beginning of the next year.
If you want to stop contributing or restart contributions, you may do so at any time.
If you do not have an investment election of file, your money will automatically be invested in the Target Date Fund that is closest to your expected year of retirement.
Any changes you make to your contribution percentages will usually take effect within two pay periods, depending on when you make the change.
IRS Limit 2016
Before-tax Annual Elective Deferral Limit $18,000
Catch-Up Contributions Allowed $6,000
Maximum IRS annual total contribution to your account (including your before-tax and after-tax contributions, as well as any company matching contributions $53,000
Annual Compensation Limit $265,000
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