Overcontributing to 401K by $1

[Davids]

I recently got my annual pay raise and bonus for 2024 so when adjusting the contribution percentages for my 401K when I do the math it will turn out it ends up being $23,001.30 I would end up contributing to my 401K by the end of 2024. With our 401K we can only contribute as whole percentages of salary and bonus, we cannot do exact dollar amounts or decimal point percentages. Is this going to be a big deal that it ends up being over the max contribution limit by $1.30? I suppose I could just wait till December and lower the contribution by 1% for the final pay of 2024 but if it ends up that being over by $1 is not a big deal then I will not do that.

[kite]

They should reduce that last payment.

I used to have much higher percentage withheld and the net effect was front-loading my 401K each year with contributions getting maxed out in the first few months. Worked out very well in the 2 years where I was laid off (once in June and once in October) as I’d already hit the max contribution for the year.

[Monocle Money Mouth]

Payroll should automatically account for that when they make the final contribution for the year. I’ve never had a an over contribution even when my contribution amount exceeded the actual amount I could contribute. If I normally contributed $500 per pay period, but only $250 would be needed to reach the annual contribution limit from my final paycheck for the year, only $250 would be contributed.

You should double check with your HR to be sure, but all the companies I have worked for will not allow you to over contribute. The only way you might accidentally over contribute is if you change jobs during the year. The new employer’s 401(k) probably won’t have any record of your old employer contributions.

[maizefolk]

Thirding the point made above:

So long as you have only one employer throughout the year they should be tracking your 401k contributions and stop you when you hit your contribution limits. I typically have my 403b contributions set to max out in roughly 10 months because it makes the math easier and it's fun to get a couple of bigger than usual paychecks at the end of the year. Depending on the year, the month 10 contribution from my paycheck ended up being a bit lower to hit my limit exactly, or a small final contribution shows up in month 11.

But no intervention required on my part beyond setting my monthly contribution at the start of the year.

[somers515]

Wait and you are just talking about pre-tax contributions, but at least in the 401k plan I'm familiar with, you can contribute more post-tax if you so choose:

The 401(k) contribution limit for 2024 is $23,000 for employee contributions, and $69,000 for the combined employee and employer contributions. If you're age 50 or older, you're eligible for an additional $7,500 in catch-up contributions, raising your employee contribution limit to $30,500. Depending on your plan, you may be able to make post-tax contributions beyond the pretax and Roth contribution limit but less than the combined employee and employer contribution limit to invest even more for retirement. Total contributions cannot exceed your annual compensation at the company that holds your plan.

And as others have said if you are working at one company the whole year they will prevent you from going over the limit.

[Davids]

Thank you for the responses, I checked with my employer and yes they would not overfund 401K. I wish I had knew that for prior years, I was typically getting within $10-$30 of the MAX with the contribution rates but should have just gone an extra percent at least for the last pay of the year.

[Duke03]

I normally go over my 401k max between $300-$400 every year.  I try to dial my 401k contributions in on the last check but sometimes an unknown bonus hits and I miss the projection.  When this happens, the money is always posted as "After-tax post 1986" since it is after tax and technically in my 401k I then just roll that portion into my Roth IRA since I paid tax on the money...