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Learning, Sharing, and Teaching => Investor Alley => Topic started by: saijoe on January 21, 2015, 07:50:55 AM

Title: 401K Match
Post by: saijoe on January 21, 2015, 07:50:55 AM
I will put in the max this year on my 401K ($24,000, I turn 50 this year).  If I go with a higher percentage early in the year and get to the max early (say in August), do I wind up losing match money for the remainder of the year.  My employer matches 50% up to 5%.  In my mind $24K is 24K, but my wife thinks there's more to the equation. 
Title: Re: 401K Match
Post by: dandarc on January 21, 2015, 07:57:37 AM
Depends on your plan - talk to your employer.  Some will true-up at year end and credit you for whatever you would have gotten had you spread it out.  Others don't (federal government, for example).
Title: Re: 401K Match
Post by: wtjbatman on January 21, 2015, 08:29:23 AM
Like dandarc said, talk with your employer. Mine spells it out clearly in the plan documents. Yes, you have to read through 20+ pages of legalese, but somewhere in there it will likely tell you. It's only mentioned once for me, but it tells me that even if I max out my contributions early in the year, they will wait till year end and make one lump sum employer contribution up to the match.
Title: Re: 401K Match
Post by: NeuroPlastic on January 21, 2015, 09:16:12 AM
If they do true-up at the end of the year, check if they do so even if you are no longer an employee.
Title: Re: 401K Match
Post by: ZiziPB on January 21, 2015, 09:36:00 AM
Talk to your employer and read your plan documents.  Mine doesn't true up at the end of the year and you need to contribute at least the match equivalent in each pay period in order to get the match (i.e. you need to contribute at least 6% to get the full match which is dollar for dollar up to 6%).  If you don't contribute, you don't get the match.  The only good thing is that they match both pre-tax and after-tax contributions so it makes it a bit easier.
Title: Re: 401K Match
Post by: CorpRaider on January 21, 2015, 01:42:39 PM
Hate to tell you this, but your wife is probably right.