Author Topic: Does 401k $17.5k limit include employer contributions?  (Read 2981 times)

rtr

  • 5 O'Clock Shadow
  • *
  • Posts: 7
Does 401k $17.5k limit include employer contributions?
« on: May 30, 2014, 03:52:51 PM »
The finance person at my work says the employer contribution counts toward the $17.5k limit. From searching the web, this seems to not be the case.

Example: http://www.bankrate.com/finance/retirement/employer-match-counts-toward-401k-limit.aspx

The IRS link below seems to suggest that $17.5k is only employee contribution (elective deferal), and only touches on the employer contribution in the overall $52k limit section:

http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics---401(k)-and-Profit-Sharing-Plan-Contribution-Limits

However, this other page below suggests the plan document may specify limits, which makes me wonder if it depends on the specifics of each 401k plan (and finance may be correct, for our plan):

http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-Contributions

I would like to be armed with something more definitive than a blog post before I continue this debate with finance.

trailrated

  • Handlebar Stache
  • *****
  • Posts: 1136
  • Age: 32
  • Location: Bay Area Ca
  • a smooth sea never made a skilled sailor
Re: Does 401k $17.5k limit include employer contributions?
« Reply #1 on: May 30, 2014, 04:02:50 PM »
The finance person at work does not know what they are talking about. The $17.5k limit is the limit for personal contributions (not including employer contributions).

Your plan might be able to limit the percentage of your paycheck that you can contribute (which is my case and very frustrating. My limit is 20% which means I am only contributing $13,000 a year). This might be due to overall contribution rates within the company.

rmendpara

  • Pencil Stache
  • ****
  • Posts: 602
Re: Does 401k $17.5k limit include employer contributions?
« Reply #2 on: May 30, 2014, 04:29:54 PM »
The $17.5k limit is for employee contributions only, there is a combined employee/employer limit of ~$50k-ish.

However, your employer may have limits that are within the IRS limits.


sobezen

  • Bristles
  • ***
  • Posts: 374
  • Age: 890
Re: Does 401k $17.5k limit include employer contributions?
« Reply #4 on: June 18, 2014, 12:07:47 PM »
Agreed the 2014 $17,500 contribution limit is your own contributions to your 401k regardless if it is a Roth 401k or a pre-tax 401k.  The thing is your employer contributions might be tied to a vesting schedule.  The vesting schedule for employer contributions is tricky and you will need to doublecheck with the plan administrator or HR.  I recommend going directly to the plan administrator because they tend to understand the vesting schedule a bit better and they have other resources that can help you too.  Let us know how it goes.  Cheers!