Author Topic: Hee. HR Freaked at How Much I Elected to Save in 401K  (Read 13127 times)

oldtoyota

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Hee. HR Freaked at How Much I Elected to Save in 401K
« on: June 16, 2015, 02:27:16 PM »
That was sorta fun. I started a new job and the HR person said he'd have to check to make sure I could invest as much as I wanted to invest. I knew I was right and I also knew it would be better to let the HR person do the research himself...Of course, it is perfectly fine for me to invest this much. =-)

But, I kinda had that MMM moment of knowing I am not like the others. Hee hee.

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #1 on: June 16, 2015, 02:45:06 PM »
Several years ago, I had my wife set her 401(k) at 80%+ at a company that permitted it.  After a call from HR, she had to reduce it because there was not enough left to cover tax withholdings.  They eventually laid her off, but I always wondered if they figured she didn't "need" the money since they knew I had a decent job and she was putting all of her income into retirement, making her an easier target.  It was a very small company so I am sure word got around.   

oldtoyota

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #2 on: June 16, 2015, 02:48:19 PM »
Several years ago, I had my wife set her 401(k) at 80%+ at a company that permitted it.  After a call from HR, she had to reduce it because there was not enough left to cover tax withholdings.  They eventually laid her off, but I always wondered if they figured she didn't "need" the money since they knew I had a decent job and she was putting all of her income into retirement, making her an easier target.  It was a very small company so I am sure word got around.

I am at a small company and wonder the same, but I think the HR guy keeps a tight lid on stuff like that...Hopefully...

kcy83

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #3 on: June 16, 2015, 05:06:36 PM »
That's really disappointing that even HR wouldn't know the max you can put in. I have a 403b / 457k where I work and I am constantly getting messages telling me what the yearly maximum is and that it's great if you can hit them. I work at a large university though so maybe that is the difference.

forummm

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #4 on: June 16, 2015, 05:34:45 PM »
HR is absolutely terrible at my job. I was shocked when I saw someone on the forum say they expected all HR to be good. I'm always in favor of freaking out HR :)

somepissedoffman

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #5 on: June 16, 2015, 06:29:31 PM »
I set mine rather high, and the HR guy asked me if I had a trust fund, because I couldn't possibly live on the remainder.  What a schmuck.

medinaj2160

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #6 on: June 16, 2015, 06:46:17 PM »
I been getting $0 paychecks for about two months. When I change my contribution to 100% I got a call from HR just be sure that it wasn't a mistake LOL

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #7 on: June 16, 2015, 06:55:34 PM »
I been getting $0 paychecks for about two months. When I change my contribution to 100% I got a call from HR just be sure that it wasn't a mistake LOL

I had pretty close to nothing for pay for the first part of the year.  My company only permits up to 50% into the 401k, but between that, a 401k loan (divorce related), child support, alimony, and as high an HSA contribution as I could do without running out of paycheck, I had my first paycheck of the year was less than 2% of my gross pay and the rest of them through March were about 2.5% of gross pay.  Beyond that things started to hit contribution maximums and I paid off the 401k loan so suddenly my pay is real good again, but it's kind of funny going for about 3 months with practically no net pay.  This is what we keep savings for.  :)

I like the quip I saw on this forum "It's not about timing the market, it's about time in the market."  I took it to heart and work to fully fund my 401k, HSA, and Roth IRA at the start of the year and then just leave it alone to maximize the time in the market.  Also, if you get laid off, it's good to know you already fully funded that stuff early in the year.

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #8 on: June 16, 2015, 07:15:04 PM »
Several years ago, I had my wife set her 401(k) at 80%+ at a company that permitted it.  After a call from HR, she had to reduce it because there was not enough left to cover tax withholdings.  They eventually laid her off, but I always wondered if they figured she didn't "need" the money since they knew I had a decent job and she was putting all of her income into retirement, making her an easier target.  It was a very small company so I am sure word got around.

I am at a small company and wonder the same, but I think the HR guy keeps a tight lid on stuff like that...Hopefully...

I've wondered about this sort of thing too. Each year, employees get copies of the benefits they've selected, including retirement plans. Every line item is broken down by cost or contribution amount. This has to be passed from HR through administrative staff at my office, some of whom are not known for always being discreet. I get the impression that eyebrows would be raised at anyone putting aside more than a three-figure amount per month.

Trifecta

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #9 on: June 16, 2015, 07:55:25 PM »
Same thing happened to me a few weeks ago. I work at a small company, and when I told the HR guy what I wanted to bump up my 401k contributions to he did a double take and asked "are you sure?" - definitely made me concerned that now they know I don't need even close to my full salary for my day to day expenses.  But it also gave me a sense of accomplishment as well ;-)

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #10 on: June 16, 2015, 10:14:40 PM »
But, I kinda had that MMM moment of knowing I am not like the others. Hee hee.

I appreciate and relate to your glee.  Lately, quite a few things said at the office give me the "one of these things [people] is not like the others" feeling of satisfaction.  (Though a few things said have made me outright ill.  I'm no frugality master but clearly I could be much more of a consumer sucka than I am.)

MDM

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #11 on: June 16, 2015, 10:58:11 PM »
...check to make sure I could invest as much as I wanted to invest.

If there is a company match, and if you are going to hit the IRS maximum before the last paycheck of the year, will the company do a "true-up" for you?

gReed Smith

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #12 on: June 17, 2015, 09:05:45 AM »
My wife's boss complimented her on how much she puts in the 401k.  It's not even that much because we max my 401k and our IRAs before we use her 401k (other than the match, of course).

Ed Mills

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #13 on: June 17, 2015, 09:22:57 AM »
I always love the looks we get when we explain to HR how we want to all of our paychecks diverted to our 457 and 403b accounts...it never gets old!  This year my wife and I are hammering those accounts to the tune of $84,000, so we have some pretty meager paychecks.  Thanks to our exploding frugality muscles, living on less is no problem for us. 

oldtoyota

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #14 on: June 17, 2015, 09:41:41 AM »
Same thing happened to me a few weeks ago. I work at a small company, and when I told the HR guy what I wanted to bump up my 401k contributions to he did a double take and asked "are you sure?" - definitely made me concerned that now they know I don't need even close to my full salary for my day to day expenses.  But it also gave me a sense of accomplishment as well ;-)

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One could argue that you DO need your full salary because you need to fund your future. =-)

Arktinkerer

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #15 on: June 17, 2015, 10:36:09 AM »
Wife did a short stint at a local college last year when some staff was out for medical leave.  She wanted them to deposit 100% into the retirement account.  Don't think they were use to that. They had to adjust so that everything but the required taxes went into the account.

Norioch

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #16 on: June 17, 2015, 10:51:25 AM »
This happened to me at my previous job when I set my contributions at 40%. They were fine with it after I confirmed; they just wanted me to verify that I hadn't accidentally typed an extra 0 or something.

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #17 on: June 17, 2015, 10:59:56 AM »
I do think most of the time they are just checking that it wasn't a typo.

Because people do make them- and those people will FREAK out if they get a next to nothing paycheck.

frugalcass

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #18 on: June 17, 2015, 12:50:03 PM »
When I received a bonus at the beginning of the year, I had to educate the administrator on being eligible to contribute 100% of it (post-tax) to my Roth 401k.

It's a small company...




kcy83

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #19 on: June 17, 2015, 01:37:46 PM »
I always love the looks we get when we explain to HR how we want to all of our paychecks diverted to our 457 and 403b accounts...it never gets old!  This year my wife and I are hammering those accounts to the tune of $84,000, so we have some pretty meager paychecks.  Thanks to our exploding frugality muscles, living on less is no problem for us.

I'm confused, I thought the 2015 limit per person for combined 457 / 403 was $18,000 each for a total of $36,000 which would make a limit of $72,000 for two people, right? Educate me please.

ZiziPB

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #20 on: June 17, 2015, 01:59:11 PM »
I always love the looks we get when we explain to HR how we want to all of our paychecks diverted to our 457 and 403b accounts...it never gets old!  This year my wife and I are hammering those accounts to the tune of $84,000, so we have some pretty meager paychecks.  Thanks to our exploding frugality muscles, living on less is no problem for us.

I'm confused, I thought the 2015 limit per person for combined 457 / 403 was $18,000 each for a total of $36,000 which would make a limit of $72,000 for two people, right? Educate me please.
One or both are 50 or older and can defer the additional $6,000 allowed by IRS?

zoltani

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #21 on: June 17, 2015, 02:21:21 PM »
HR is absolutely terrible at my job.

Well, maybe you should be doing your job instead?


bb11

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #22 on: June 17, 2015, 02:31:57 PM »
I just recently had a conversation with a coworker who freaked when I said I put 50% of my paycheck in my 401k. Also at an old job, twhere my company had a limit of 25% contributions, the HR rep couldn't understand why someone (me) with such a low salary would want to contribute more than 25%. :)

ender

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #23 on: June 17, 2015, 04:06:40 PM »
Mine is currently at 75% (which is our maximum).

Last year the maximum was 50%, until I asked if it could be higher.

Woot.

Elderwood17

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #24 on: June 17, 2015, 08:04:04 PM »
HR is absolutely terrible at my job.

Well, maybe you should be doing your job instead?
That is good!

I work for a large company and HR is very specialized.  Get the right person and they know their stuff but ask them anything outside of their area and they glaze over.

Bateaux

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #25 on: June 17, 2015, 09:46:18 PM »
24k wife 401k + 2k company match

18k myself 401k + 5k company match

Just under 50k in 401ks for 2015 alone.

My company will add 17k to my cash balance pension for 2015

We will add 5.5k and 6.5k to our Roths for 2015

Already invested 6k into Vanguard Strategic Equity for 2015 will add more.

Thats 84k already on schedule for new investment for 2015.

Goal is 100k new money invested in 2015.  Pretty much a done deal.

I'm sure the 1.3M stash will add a few dollars unless the market turns bearish.

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #26 on: June 17, 2015, 11:57:54 PM »
That was sorta fun. I started a new job and the HR person said he'd have to check to make sure I could invest as much as I wanted to invest. I knew I was right and I also knew it would be better to let the HR person do the research himself...Of course, it is perfectly fine for me to invest this much. =-)

But, I kinda had that MMM moment of knowing I am not like the others. Hee hee.

I set mine to 80% late last year (then reduced to 10% two months ago so I don't top out too early and miss the free match money). Anyway, when I turned in the 80% form, the girl in HR took one look at it and her exact words were “My God!”    Sweet.   :-)

RecoveringCarClown

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #27 on: June 18, 2015, 12:07:54 AM »
24k wife 401k + 2k company match

18k myself 401k + 5k company match

Just under 50k in 401ks for 2015 alone.

My company will add 17k to my cash balance pension for 2015

We will add 5.5k and 6.5k to our Roths for 2015

Already invested 6k into Vanguard Strategic Equity for 2015 will add more.

Thats 84k already on schedule for new investment for 2015.

Goal is 100k new money invested in 2015.  Pretty much a done deal.

I'm sure the 1.3M stash will add a few dollars unless the market turns bearish.


Why not FIRE already?

Bateaux

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #28 on: June 18, 2015, 02:28:53 AM »
24k wife 401k + 2k company match

18k myself 401k + 5k company match

Just under 50k in 401ks for 2015 alone.

My company will add 17k to my cash balance pension for 2015

We will add 5.5k and 6.5k to our Roths for 2015

Already invested 6k into Vanguard Strategic Equity for 2015 will add more.

Thats 84k already on schedule for new investment for 2015.

Goal is 100k new money invested in 2015.  Pretty much a done deal.

I'm sure the 1.3M stash will add a few dollars unless the market turns bearish.

Waiting out the 2016 election to see where health care and Social Security are headed.  Still carrying my 20 and 22 year old on my health insurance.

Why not FIRE already?

zinnie

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #29 on: June 18, 2015, 07:57:29 AM »
Same thing happened to me! When I changed it to 20% a while back they thought it was a typo and called me to see if I really meant to change it to that high.

Great feeling! :)

Mrs.LC

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #30 on: June 18, 2015, 08:34:22 PM »
Sad that HR personnel aren't more knowledgeable about retirement plans. I spent plenty of time educating a former HR coworker on election amounts of a 457 plan. Even sadder was the fact that the plan was available and very very few employees enrolled in it.   

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #31 on: June 18, 2015, 09:24:49 PM »
I get the impression that eyebrows would be raised at anyone putting aside more than a three-figure amount per month.

That is especially sad since 3-figs per month won't max it.

Sad that HR personnel aren't more knowledgeable about retirement plans. I spent plenty of time educating a former HR coworker on election amounts of a 457 plan. Even sadder was the fact that the plan was available and very very few employees enrolled in it.   

:-( I wish I was allowed to enroll in ours.  Alas, it is a "top hat" program and I don't earn enough to wear a top hat, apparently.  I only even know about it by accident.

mamamoney

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #32 on: June 19, 2015, 01:41:35 PM »
Maybe silly...but I thought the 401k max was $17,500? Can you put more in each year?

dandarc

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #33 on: June 19, 2015, 01:44:18 PM »
Maybe silly...but I thought the 401k max was $17,500? Can you put more in each year?
It is indexed to inflation - in 2014 you could put $17,500.  for 2015 $18,000.

Even more if you're over 50 - $6,000 "catch up" (2015).

And of course, assuming your plan isn't more restrictive than the IRS allows.

CanuckExpat

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #34 on: June 19, 2015, 02:25:04 PM »
Maybe silly...but I thought the 401k max was $17,500? Can you put more in each year?

There is a combined maximum for both you and your employers contributions of $53,000.

Depending on if your employer allows it, after hitting the 18k limit, you might be able to contribute after tax funds up to the 53k max as part of the so called Mega Backdoor Roth

MDM

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #35 on: June 19, 2015, 02:34:36 PM »
Maybe silly...but I thought the 401k max was $17,500? Can you put more in each year?
It is indexed to inflation - in 2014 you could put $17,500.  for 2015 $18,000.

Even more if you're over 50 - $6,000 "catch up" (2015).

And of course, assuming your plan isn't more restrictive than the IRS allows.

And yes, those are the limits per year.  E.g., you invested $17,500 in 2014 plus $18,000 in 2015 so you have invested $35,500 - and will be able to add more in 2016, etc.

mamamoney

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #36 on: June 20, 2015, 09:20:36 AM »
ah - thank you!

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #37 on: June 20, 2015, 09:24:10 AM »
I do think most of the time they are just checking that it wasn't a typo.

Because people do make them- and those people will FREAK out if they get a next to nothing paycheck.

This. A recent project had me working closely with HR and the requests they get. You would be shocked by the number of "accidents" that employees make (either through a lack of understanding what certain elections will do to salary or the standard fat finger entry) that have to be cleaned up on the back end.

Need2Save

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #38 on: June 20, 2015, 11:54:47 AM »
Ouch!  Although someone with more sensitivity may not admit to working in HR field after above comments, I do!!!  Not only do I work in HR, but I manage all of our Benefit Plans including our 401k.  On behalf of the HR/Benefit professionals out there, let me point out a few things that may not occur to many:

1 -- Many people do make mistakes and seeing a high deferral rate above 20% does give one pause to make sure that there was no unintentional error made by the employee.  We do see high % deferrals near the end of the year when new hires come in and try to maximize the contribution as much as possible before the calendar resets.  But I have seen employees 'MEAN' to put in 5% or 6% and then they mistakenly put in 50% or 60% online and all of a sudden they can't make their rent for that month and they are calling in a panic.  Please be grateful that your HR or Payroll team is monitoring and double checking for you. 
2 -- Many employers struggle with excessive use of Hardship Withdrawals by employees who do not put aside an emergency fund.  It really pains us to see them pay income taxes plus a 10% penalty for pretty predictable expenses if you are under 59 1/2.  Cars do need maintenance from time to time and you have to save for this.  We all get sick from time to time and you have to plan for this.  Folks taking these withdrawals must first exhaust any available 401k loan options, so they are already paying themselves back for an earlier need.   There are also limits on what you can pull money out for.  The car repair example won't fly, but medical bills or to prevent eviction or foreclosure will. 
3 -- Unfortunately, readers on this blog have a much less common view on wealth accumulation.  I can't tell you the number of employees we counsel who don't even look at their pay stubs!  I mean ever!  They 'thought' they enrolled in the 401k plan when they were hired, but actually did not and now 5, 10, even 15 years go by and somehow they thought would be ready to retire without giving it another thought and they actually have nothing saved.  Really sad.  So glad you carefully review your paystubs and apply basic planning to your retirement readiness plan. 
4 -- Be sure you understand how your Company does employer matching.  Not every company does a true-up at the end.  If your Company does the employer matching on a per-pay period basis, you want to STRETCH the contributions over the whole year to get every penny.  Putting too much early or late in the year means you miss out on matching for some of the year, unless they do it as a lump sum once a year OR do the True-up.  Most employers do not do it this way!!! 
5 -- I don't think I am the minority in the HR community.  I max out my personal 401k EVERY year and so does my husband.  I plan to retire early and leave the workforce sooner than many.  I also max out my HSA contributions, and invest it, so we'll have $ to pay for healthcare expenses into our retirement years.   I only say this to point out that SOME of us in HR do follow what we preach. 
6 -- Someone also pointed out that you get someone in HR and they are 'specialized' and 'glaze' over when you ask them anything else.  Like many industries, HR is actually highly specialized.  In general, there are 2 types of HR professionals, the kind that know a little bit about most HR functions, we call them 'Generalists', and then the kind that focus on targeted functions, we call them 'Specialists'.  The larger Company you work for, the more likely you are to have mostly 'specialists'.  This allows the department to divvy up responsibilities so that they can really, really understand one or more areas and be experts on those subject matters.  If you have questions spanning many different areas, I don't really consider it a burden to speak to more than one person to get assistance. 

Sadly, the truth is that your 'HR guy' probably 'freaked' out because too many employees have the opposite outlook on personal finance and have their heads in the sand.  Hopefully, what you thought was him 'freaking' out was simply him refreshed/impressed that it seems you have your act together and you are one less employee he has to worry about. 

MDM

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #39 on: June 20, 2015, 12:04:26 PM »
Cap'n B, thanks for sharing that.  Well said!

Paul der Krake

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #40 on: June 20, 2015, 12:11:53 PM »
Nicely put, Captain Benefits. We shouldn't begrudge HR for making a 5 mn phone call and clarifying an outlier situation. In banking they call this Know Your Customer (KYC) and looking for unusual patterns, regardless of their legality, is exactly what they are trained to do.

daymare

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #41 on: June 20, 2015, 01:23:58 PM »
Awesome thread - my husband just became eligible for a 401(k) within the last month, and we set his contributions to the maximum allowed at his company (70%).  It feels deliciously awesome to see his tiny weekly paycheck deposits and log into his 401(k) account and see a nice-sized chunk of a deposit there.

ender

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #42 on: June 20, 2015, 01:25:02 PM »
4 -- Be sure you understand how your Company does employer matching.  Not every company does a true-up at the end.  If your Company does the employer matching on a per-pay period basis, you want to STRETCH the contributions over the whole year to get every penny.  Putting too much early or late in the year means you miss out on matching for some of the year, unless they do it as a lump sum once a year OR do the True-up.  Most employers do not do it this way!!! 


I will say, my large company (50k+ people) does it this way. I had to investigate to find out for sure though as it isn't exactly specified in how the plan works...

We are changing payroll systems soon and I have been reassured that the new one will do so always. I will find out in the next few months if not - and be very, very, VERY annoyed if it changed!


okits

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #43 on: June 20, 2015, 08:19:55 PM »
Thanks for sharing the view from the other side, CaptainBenefits.  It does make sense that HR would double check (or at least raise an eyebrow) at unusual (though, unusually smart) requests.

oinkette

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #44 on: June 21, 2015, 12:42:35 PM »
When I decided to switch to the max to deduct from my paycheck, my HR didn't freak out but they did send a follow up email to make sure before going through with it.  It sucks because it was on a Friday and I was away from the office and didn't get the message until Monday...too late for the next paycheck. Sigh.

forummm

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Re: Hee. HR Freaked at How Much I Elected to Save in 401K
« Reply #45 on: June 21, 2015, 02:56:51 PM »
HR is absolutely terrible at my job.

Well, maybe you should be doing your job instead?

That's why they gave me the position.