Hi there,
Hoping that someone can help clarify for me the rules and regulations RE max contribution to the 401k + company contribution, and give a bit of advice on the best strategy for this year. I also plan to ask my401k representative this, but haven't been able to get in touch yet, so figured I would throw this out to all the smart Mustachians out there in hopes of getting some help.
I just started my job this past year and have a 401k for the first time (23 years old). I started as soon as I was eligible in June 2014 after a 90 day period, with a 9% contribution, or about $300 a month. I have now bumped it up to 11% for 2015, so contributing $400 a month, and hope to increase that number dramatically, as I know it is best to max out your 401k. I get a 3% of my salary employer contribution, regardless of whether I contribute or not. Related, I am also paying down student loans, so am throwing a lot of extra money at that right now.So here are my questions:
1. Should I continue to pay more towards my student loans or pay the minimum and throw more money into the 401K to max it out? I have about $25K in student loans, and hoping to have them fully paid off by mid-2016 if I keep paying them at this rate.
2. Is the 3% contribution from my employer counted in the $18K total, or is that in addition to the 18k? IE if I maxed it out at 18K, would they still put in the 3% for another $1,350, or should I stop short of the $18K and only put in enough so that when they contribute the 3%, it totals $18k?
Thanks for your help!