Author Topic: 2015 401k Contribution Rate - Please chime in!  (Read 25624 times)

h2ogal

  • Stubble
  • **
  • Posts: 235
  • Location: FingerLakes
2015 401k Contribution Rate - Please chime in!
« on: January 06, 2015, 07:20:40 PM »
Guys and Gals!

Had an idea to do something different this year with 401k contribution rates.  Instead of spreading my contributions over the year I'm maxing out contribution as early as possible in the year.  I just set my contribution at the max they allow - 50% of gross pay.  (Not sure I can sustain this level, but Im going to try it, and if I do I can max out 401K in by May!)

Here were my thoughts on why it makes sense to do this:

1. If I leave my current company for any reason during 2015, and I have a 401k 'waiting period' at a new job, then I wont lose any contribution opportunity. 

2. More time the $$ are in the market, more time to grow and compound.

3. My company does a year - end true up so I wont miss out on "match"  (Other places I have worked in the past didn't do this, so you had to plan to contribute the 6% each month or miss the match that month).

What do you guys plan to do, and why??

hexdexorex

  • Stubble
  • **
  • Posts: 158
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #1 on: January 06, 2015, 07:27:44 PM »
I always front load my contribution. Company matches 20% of what I put in.

MikeBear

  • Bristles
  • ***
  • Posts: 390
  • Age: 63
  • Location: Michigan
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #2 on: January 06, 2015, 07:37:35 PM »
I have to contribute every check, or miss out on the match. So, I adjust as needed to spread $24k over 26 paychecks.
« Last Edit: January 06, 2015, 09:36:42 PM by MikeBear »

mochila

  • 5 O'Clock Shadow
  • *
  • Posts: 51
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #3 on: January 06, 2015, 08:01:40 PM »
Heh. My employer's maximum match is $20. I'm putting in $750 twice a month, anyhow, but you'd think we were being discouraged from contributing.

Not that I'm complaining about the 10% in the 401a whether or not I contribute. . .

EDSMedS

  • Stubble
  • **
  • Posts: 211
  • Age: 37
  • Location: Washington, DC
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #4 on: January 06, 2015, 08:05:18 PM »
Both DW and I contribute 100% until filled.  It's not hard b/c we keep ~10mo cash reserve and go WAY aggressive on investments.

27y/oTennesseeRetiree

  • 5 O'Clock Shadow
  • *
  • Posts: 49
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #5 on: January 06, 2015, 09:14:49 PM »
I just set mine so that it would cover the $18k in 25 pay periods... that way my Christmas spending (very minimal) shows up in the 26th period automatically. 

Yes... i went back to work. SWAMI style. Max 4 days in the office a month. Max 2 hours any one of those days. Dreams do come true with FU money and passive income.

chasesfish

  • Magnum Stache
  • ******
  • Posts: 3776
  • Age: 39
  • Location: South Carolina
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #6 on: January 07, 2015, 05:46:26 AM »
I also front load my contributions, the excess contributions over $18,000 are setup to "spill over" into a different investment vehicle through work. 

dude

  • Handlebar Stache
  • *****
  • Posts: 2373
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #7 on: January 07, 2015, 06:13:01 AM »
With the Fed TSP, you have to spread it out equally over 26 pay periods or lose out on matching funds.

oldfierm

  • 5 O'Clock Shadow
  • *
  • Posts: 47
  • Age: 40
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #8 on: January 07, 2015, 09:31:47 AM »
I'm not so much of a badass that I can front load my TSP (military) contributions yet.  BUT I did set my contribution level to 20% - that, plus a bonus in March, should put me at the max by November!!  MY FIRST TIME MAXING TSP and both Roths for myself and my wife.  I seriously couldn't be more proud, and I haven't been able to tell anyone but you guys!
« Last Edit: January 07, 2015, 09:36:15 AM by oldfierm »

h2ogal

  • Stubble
  • **
  • Posts: 235
  • Location: FingerLakes
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #9 on: January 07, 2015, 06:16:37 PM »
....MY FIRST TIME MAXING TSP and both Roths for myself and my wife.  I seriously couldn't be more proud, and I haven't been able to tell anyone but you guys!

I'm proud of all of you guys!!!  Congrats!!   

irishbear99

  • Bristles
  • ***
  • Posts: 295
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #10 on: January 07, 2015, 06:29:16 PM »
Just make sure you read the rules for your plan. I'm also in a situation where I can't front load because the matching is based on the amount contributed each paycheck, which means if I don't get the match if I don't contribute during a pay period.

jasman18

  • 5 O'Clock Shadow
  • *
  • Posts: 35
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #11 on: January 08, 2015, 11:52:46 AM »
MY FIRST TIME MAXING TSP and both Roths for myself and my wife.  I seriously couldn't be more proud, and I haven't been able to tell anyone but you guys!

Why cant you tell people close to you? Wouldnt that inspire them to save more?

WYOGO

  • Stubble
  • **
  • Posts: 165
  • Location: Salt Lake City
  • Great Basin
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #12 on: January 08, 2015, 12:07:53 PM »
I also cannot front load, but will be maxing the Pre and Post 401K throughout the year, maxing the tIRA and back filling excess into the taxable. I don't want to front load the Pre because there are per pay period percentage restrictions on the Post contributions despite a potential Pre true up, so a more evenly spread distribution better optimizes my contributions as a potential extreme early retiree.

oldfierm

  • 5 O'Clock Shadow
  • *
  • Posts: 47
  • Age: 40
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #13 on: January 08, 2015, 01:37:23 PM »

Quote
Why cant you tell people close to you? Wouldnt that inspire them to save more?

It might, but I'd be overcoming a lot of upbringing and social programming to have that discussion.  My parents NEVER spoke to me about their finances (they are typical millionaires next door), and my peers never talk about the details of their financial situations.  It's just not OK.  Reading your suggestion, I tried to picture myself telling my sister I maxed out my 401K and Roths, it makes me feel ill.  In my mind, I would a) be bragging and b) revealing personal financial details that I've been trained are not OK to discuss.  And that's my sister (who, by the way, is probably an excellent saver)...to tell anyone else would be unthinkable!! 

This is probably why our society is so screwed up about money.  It should be more acceptable to talk about being a good saver than about being a big spender, but I don't think we are there yet! And clearly, I am not!   

EDSMedS

  • Stubble
  • **
  • Posts: 211
  • Age: 37
  • Location: Washington, DC
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #14 on: January 08, 2015, 02:01:51 PM »
This thread just made us some money!  Wife is a new fed employee, so we would have LOST money by front loading!

We will be adjusting her contributions now.  Dang.

dividendman

  • Handlebar Stache
  • *****
  • Posts: 1415
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #15 on: January 10, 2015, 11:02:48 PM »
50%, max allowed... dang these paycheques with social security, 4011k and everything withheld are so much smaller than the ones just before newyears :(

Frugalicious

  • 5 O'Clock Shadow
  • *
  • Posts: 79
  • Location: Atlanta, Georgia
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #16 on: January 11, 2015, 04:42:23 AM »
30%.  A little front loading, but my company trues up at year end.

Indio

  • Bristles
  • ***
  • Posts: 413
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #17 on: January 11, 2015, 08:28:57 AM »
I usually front load so that I've maxed it out by Sept. Since I'm planning on switching jobs soon, I increased the deduction to 50%. Bonus gets paid in Feb and that boost should get me to the individual max contribution by time I leave that job in March. Company match continues throughout year as long as you've contributed more than 6%.

desk_jockey

  • Bristles
  • ***
  • Posts: 321
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #18 on: January 11, 2015, 08:58:58 AM »
I'm partially front loaded, as my annual bonus pays out in 1st Q and I start with a higher percentage.  Some years I get a smaller commission share payment in the 2nd Half, so I tweak the percentage over the year to ensure that I'm still getting the company match on the last paycheck. 

Caoineag

  • Pencil Stache
  • ****
  • Posts: 666
  • Age: 40
  • Location: Michigan
    • My Journal
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #19 on: January 11, 2015, 11:04:46 AM »
35% and 20% because those amounts guarantee the max. Overtime generally means we slightly front load which is fine since I get no employer match and DH's match is by quarter (aka as long as a certain amount is in 4th quarter, we get full match).

NinetyFour

  • Walrus Stache
  • *******
  • Posts: 6127
  • Age: 60
  • Location: Southwestern US
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #20 on: January 11, 2015, 01:24:28 PM »
Once I fully fund my Roth for 2015 and pay my April taxes, I will dump everything I can into my 403b account as fast as I can--I will max it out at $24,000.  Meanwhile, 19.4% of my salary will go to my 401a account every month.  (That percentage is set by my employer:  8% is my contribution, and 11.4% is my employer's contribution.)

Nords

  • Magnum Stache
  • ******
  • Posts: 3331
  • Age: 61
  • Location: Oahu
    • Military Retirement & Financial Independence blog
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #21 on: January 11, 2015, 04:50:02 PM »
I'm not so much of a badass that I can front load my TSP (military) contributions yet.  BUT I did set my contribution level to 20% - that, plus a bonus in March, should put me at the max by November!!  MY FIRST TIME MAXING TSP and both Roths for myself and my wife.  I seriously couldn't be more proud, and I haven't been able to tell anyone but you guys!
Excellent.  Congratulations.  I wish we could read about more people maximizing their tax-deferred contributions.

LackOfSense

  • 5 O'Clock Shadow
  • *
  • Posts: 9
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #22 on: January 12, 2015, 08:45:39 AM »
I'm not so much of a badass that I can front load my TSP (military) contributions yet.  BUT I did set my contribution level to 20% - that, plus a bonus in March, should put me at the max by November!!  MY FIRST TIME MAXING TSP and both Roths for myself and my wife.  I seriously couldn't be more proud, and I haven't been able to tell anyone but you guys!

This year is the first time I've been able to max out my TSP as well. I don't get any bonuses so my contribution rate is at 27%. Still quite a ways from maxing out the wife's contributions but she does get some matching which is helpful (full match up to 5%). Should be able to max her's out once we pay off my non-Mustachian car in 6 months. Then we will be completely debt free.

couponvan

  • Walrus Stache
  • *******
  • Posts: 7440
  • Location: VA
    • My journal
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #23 on: January 12, 2015, 11:32:18 AM »
I am contributing 40% of my PT salary plus $500 per check to the HSA this year. I will max out the HSA in June.  Right in time to afford Summer Camp so I can keep worjing in the Summer.  My company only matches lump sum 1x per year, so it doesn't matter when I do my contributions.  My husband's company matches per pay period, so we have to smooth his out over the year more. However his match is 9%, and mine is only 2.5%....so it would hurt to miss his match!

The_Dude

  • Stubble
  • **
  • Posts: 203
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #24 on: January 12, 2015, 11:39:40 AM »
Like others have posted I do max out before year end but it's usually around October/November depending on bonuses.

I don't get overly aggressive because I end up putting roughly the same amount to work in the market regardless.  As soon my 401K maxes I increase my taxable investments accordingly.

The one time I switched jobs I took 5 months off and still maxed my 401k for the year by bumping the contributions at the new job super high.

BooksAreNerdy

  • Bristles
  • ***
  • Posts: 257
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #25 on: January 12, 2015, 02:27:45 PM »
Set at 14% for the year to max it out. I'm not sure if we still get the match if we front load. Worth looking in to.

Pooperman

  • Magnum Stache
  • ******
  • Posts: 2880
  • Age: 31
  • Location: North Carolina
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #26 on: January 12, 2015, 04:08:46 PM »
Can't front load. 22% is what I'll be doing (14k). When I can max it, my 401k allows $ amounts too, so I'll do max/24 per paycheck when that happens so I don't have to think.

2Birds1Stone

  • Walrus Stache
  • *******
  • Posts: 6683
  • Age: 1
  • Location: Earth
  • K Thnx Bye
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #27 on: January 12, 2015, 04:15:21 PM »
My company sucks and only lets us do a max of 20% of base salary. Which for me means only being able to hit 50% of the IRS imposed limit.

kpd905

  • Handlebar Stache
  • *****
  • Posts: 1932
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #28 on: January 12, 2015, 05:30:33 PM »
I think my company will only match each paycheck, and I am not eligible for the 401k until March, so I have to put 26% or so starting then so I can max it out.

UnleashHell

  • Walrus Stache
  • *******
  • Posts: 8752
  • Age: 54
  • Location: Florida
  • Chapter IV - A New ... er.. something
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #29 on: January 13, 2015, 08:44:49 AM »
my company matches per paycheck. its set right now to be just under the max for the eyar - I'll look at it again when (if) I get a bonus and/or pay increase in April and change it to get as close to max out as I can.

CheapskateWife

  • Handlebar Stache
  • *****
  • Posts: 1407
  • Location: Central TX...but considering a move
  • FIRE'd and Loving it!
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #30 on: January 13, 2015, 11:13:17 AM »
This thread just made us some money!  Wife is a new fed employee, so we would have LOST money by front loading!

We will be adjusting her contributions now.  Dang.

This right here is why I love the forum!  I'm so darn grateful for this (mostly) fine group of helpful folks. 

chowtime

  • 5 O'Clock Shadow
  • *
  • Posts: 3
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #31 on: January 13, 2015, 12:39:45 PM »
66% between my 403b and 457.  Planning to max out both by summer.

dandarc

  • Magnum Stache
  • ******
  • Posts: 4753
  • Age: 39
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #32 on: January 13, 2015, 12:59:21 PM »
Right now we do $720 / bi-weekly check into my wife's 457 - maxes out in 25 checks.  Might discuss with her about front-loading this, as this in my mind is our best retirement vehicle.

I'm self employed - I put 18.5% of my income each month for employer match into a Solo 401K.  The 18K deferral is priority #1, Roth IRA's are priority #2, finally extra on our mortgage (will be a taxable account once mortgage is paid off next year.  I expect to be sending in extra on the mortgage by October this year, hopefully sooner.

Iron Mike Sharpe

  • Bristles
  • ***
  • Posts: 397
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #33 on: January 13, 2015, 01:25:18 PM »
The corporation I work at sucks too.  We can only contribute up to 25% (plus 4% match).  So I am unable to max out. 

Pooperman

  • Magnum Stache
  • ******
  • Posts: 2880
  • Age: 31
  • Location: North Carolina
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #34 on: January 13, 2015, 01:29:59 PM »
For those that 'can't' max the 401k, check with your HR/whomever sends out the paychecks. You may be able to send them a check to add to the 401k. It's worth taking a look at (I've seen it mentioned before around the forums).

SomedayStache

  • Pencil Stache
  • ****
  • Posts: 808
  • Live Long and Prosper
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #35 on: January 13, 2015, 01:34:45 PM »
Since there's been quite a few government employees on this thread mentioning the TSP - did everyone get the memo that for 2015 there are actually 27 payperiods rather than the typical 26?  Be sure to adjust your TSP withholdings accordingly. 

Here's some text from an email we got in my organization:

TSP Example:
$692.31 x 27 paydays = $18,692.37
Maximum employee contribution for 2015 is $18,000.00
Employee reaches maximum contribution in Payday 26.
Pay period 27: No employee contribution, no agency matching, employee receives only the automatic 1% government contribution.

If the TSP contribution is calculated based on 26 paydays versus 27 payday, the employee will reach the maximum contribution prior to the end of the pay year.  This will result in the loss of matching Government contributions.  Employees are encouraged to review their TSP elections for 2015 to avoid a potential loss of TSP matching Government contributions.

TSP Catch-Up Contributions – The amount to be withheld each payday may be calculated using 27 paydays versus the normal 26 paydays.

seattlecyclone

  • Walrus Stache
  • *******
  • Posts: 6267
  • Age: 37
  • Location: Seattle, WA
    • My blog
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #36 on: January 13, 2015, 05:04:30 PM »
I'm front-loading the pre-tax 401(k) until it's maxed out, to be immediately followed by maxing out the after-tax 401(k). My paychecks will be zero until that happens. I like to think of it as essentially transferring money from taxable accounts into retirement accounts.

dandarc

  • Magnum Stache
  • ******
  • Posts: 4753
  • Age: 39
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #37 on: January 13, 2015, 05:15:49 PM »
I'm front-loading the pre-tax 401(k) until it's maxed out, to be immediately followed by maxing out the after-tax 401(k). My paychecks will be zero until that happens. I like to think of it as essentially transferring money from taxable accounts into retirement accounts.
Are you rolling the after-tax 401(k) to a Roth IRA (Megabackdoor Roth)?

seattlecyclone

  • Walrus Stache
  • *******
  • Posts: 6267
  • Age: 37
  • Location: Seattle, WA
    • My blog
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #38 on: January 13, 2015, 05:25:29 PM »
I'm front-loading the pre-tax 401(k) until it's maxed out, to be immediately followed by maxing out the after-tax 401(k). My paychecks will be zero until that happens. I like to think of it as essentially transferring money from taxable accounts into retirement accounts.
Are you rolling the after-tax 401(k) to a Roth IRA (Megabackdoor Roth)?

Yes! My 401(k) web page has a button to roll over these funds with just a few clicks, so it's super easy!

mm1970

  • Walrus Stache
  • *******
  • Posts: 9350
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #39 on: January 13, 2015, 05:30:30 PM »
My company doesn't match. I originally had my 401k set up in 2012 to hit annual max at my salary at the time, (which is the same as now), except I was working 80%.

So now I hit the max some time in October or November.  I'm leaving it that way.

MrMoogle

  • Handlebar Stache
  • *****
  • Posts: 1136
  • Age: 36
  • Location: Huntsville, AL
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #40 on: January 14, 2015, 03:02:33 PM »
I have a company  match.  To get that I need to put in 5%.  So I figure how much that is, and how much remains out of the 18k.  I usually front load this whatever remains (ignoring the 5%), then drop to 5% for the rest of the year.  Then the last couple paychecks I jump up to about 20% to make sure I hit the limit.

Mortgage Free Mike

  • Stubble
  • **
  • Posts: 129
  • Age: 36
    • Save on Almost Everything
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #41 on: January 14, 2015, 05:34:41 PM »
I am doing this as well, though my company only allows me to contribute 40% each paycheck. This is the first year my company will "true-up" at the end of the year. Yay!

Kwill

  • Handlebar Stache
  • *****
  • Posts: 2326
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #42 on: January 14, 2015, 06:09:55 PM »
My company sucks and only lets us do a max of 20% of base salary. Which for me means only being able to hit 50% of the IRS imposed limit.

You know, I thought my employer limited us to 20% contributions to the 403b. So after reading MMM and learning I should be contributing more, I filled out the paperwork to increase my contribution from 5% to the maximum allowed--thinking that was going to be 20%. This was in September. Then I got an email from the HR person double-checking it with me since contributing the maximum would mean a "zero paycheck" for October, November, and December.

So anyway, I haven't been paid since September, and my emergency fund's low at this point. But I contributed a lot more to my 403b last year than I thought was possible. I started too late to max it out, but this year I'll start at 30% and adjust up later if the budget allows.

Beric01

  • Handlebar Stache
  • *****
  • Posts: 1156
  • Age: 31
  • Location: SF Bay Area
  • Law-abiding cyclist
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #43 on: January 14, 2015, 07:07:37 PM »
My company lets me put 75% of my paycheck in. I front-load and max out early in the year. I also have a 3% match. I guess if I were optimal I'd calculate the exact amount such that I could get the match for the entire year, but instead I just accept the lump-sum payment they give me at the end of the year for any match contributions I missed due to having maxed out early. The problem is I also get a raise mid-year, which further complicates things.

Guesl982374

  • Bristles
  • ***
  • Posts: 498
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #44 on: January 15, 2015, 07:28:04 AM »
No front loading for us. My wife and I make equally across the year to fully capture all employer matching.

cazaubon

  • 5 O'Clock Shadow
  • *
  • Posts: 25
  • Location: Montréal, Canada
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #45 on: January 17, 2015, 09:08:16 PM »
I am putting 100% of my salary in so I can max out asap and living on savings for the first few months of the year (since I am planning to FIRE in May).

dunhamjr

  • Stubble
  • **
  • Posts: 241
  • Age: 46
  • Location: Kent, WA (Seattle)
  • mustachian in training est. July 14
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #46 on: January 17, 2015, 11:04:31 PM »
Had planned to just have it set at a level rate for the year to get the max contribution.

Interesting idea to front load the process.

rpr

  • Guest
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #47 on: January 18, 2015, 01:04:00 AM »
To me, it seems like all of this front loading is too much work. Keeping track etc. I'm lazy and will forget. I just put in equal amounts into everything every pay period. We don't have matches etc. Our employer puts in 10% irrespective of any employee matches. Also not possible for us to make any excess after tax contributions either.


NorCal

  • Pencil Stache
  • ****
  • Posts: 970
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #48 on: January 18, 2015, 09:59:26 AM »
I spread mine over the year because of matching.  My wife front loads hers because she usually gets a sizable bonus in January she can take advantage of, and matching isn't an issue for her.

LowER

  • Stubble
  • **
  • Posts: 161
Re: 2015 401k Contribution Rate - Please chime in!
« Reply #49 on: January 18, 2015, 11:16:28 AM »
100% every year