Author Topic: Yay! I got 100% employer match in my 401k for 2020, first time for me  (Read 1652 times)

ctuser1

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Yes, it might sound trivial for most people on this forum, but is significant for me!

My employer's 401k does not offer true-up match. I used to max out my 401k by Sept/Oct and would lose out on the employer match portion (a few hundred bucks) every year that would have been deposited if I was still contributing to the 401k for the rest of the year.

I discovered this in 2019. Yes, the story of why I discovered it so late belongs in the "antimustachian" forum. By my calculations, my 401k/rollover-IRA balances would be several tens of thousands higher had I discovered this when I started maxing out my 401k.

Nevertheless, I took steps to remedy this for 2020. It basically involves adjusting the contribution rates precisely a couple of times - once at the beginning of the year and once after the yearly bonus. The aim is to make sure that I am contributing *at least* = monthly employer contribution amount till the very last paycheck.

Today morning, I saw the following in the 401k website (image attached):


MM_MG

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Re: Yay! I got 100% employer match in my 401k for 2020, first time for me
« Reply #1 on: January 03, 2021, 02:42:18 PM »
Congrats!

If the annual bonus is variable and/or at the end of the year, another technique would be to see if the employer will match on post-tax contributions.  Then have your pre-tax contributions switch to post-tax contributions once you've met the $19,500 limit.  Even better if you can then roll those post tax contributions into an IRA via the "mega back door" Roth...assuming your plan allows for in plan conversions. 

Dicey

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Re: Yay! I got 100% employer match in my 401k for 2020, first time for me
« Reply #2 on: January 14, 2021, 09:15:49 AM »
One of the many reasons I'm happily FIRE is that my employer only matched every paycheck. You had to deposit the exact amount every pay period. No front loading, no truing up, etc. Given that we were straight commission, it was an extremely difficult target to hit. I finally stopped trying and stopped worrying about it. In the end, I got to FIRE anyway, and you will, too. Congratulations!

ctuser1

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Re: Yay! I got 100% employer match in my 401k for 2020, first time for me
« Reply #3 on: January 14, 2021, 12:06:15 PM »
Congrats!

If the annual bonus is variable and/or at the end of the year, another technique would be to see if the employer will match on post-tax contributions.  Then have your pre-tax contributions switch to post-tax contributions once you've met the $19,500 limit.  Even better if you can then roll those post tax contributions into an IRA via the "mega back door" Roth...assuming your plan allows for in plan conversions.

No post-tax contribution are allowed in my plan :-(..

It would have been nice if I could do post-tax contribution + in service rollover. I could do the mega-backdoor Roth in that case. I'd much rather dump the money in mega-backdoor roth rather than 529 for college savings. But no such luck for me :-(

ctuser1

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Re: Yay! I got 100% employer match in my 401k for 2020, first time for me
« Reply #4 on: January 14, 2021, 12:07:28 PM »
One of the many reasons I'm happily FIRE is that my employer only matched every paycheck. You had to deposit the exact amount every pay period. No front loading, no truing up, etc. Given that we were straight commission, it was an extremely difficult target to hit. I finally stopped trying and stopped worrying about it. In the end, I got to FIRE anyway, and you will, too. Congratulations!

Thanks.

Let's hope we get a good bubble that takes me past my fat-FI asap. :-D.. I'm likely one bubble away.


American GenX

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Re: Yay! I got 100% employer match in my 401k for 2020, first time for me
« Reply #5 on: January 14, 2021, 01:15:32 PM »

My company gives a 200% match on contributions up to 2% of my salary, but I'm contributing over 50% of my salary now in 457B and 401a combined, and their match is only on the first 2% of my salary.  But I've always set it up to get the maximum employer contribution.

jinga nation

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Re: Yay! I got 100% employer match in my 401k for 2020, first time for me
« Reply #6 on: January 22, 2021, 06:27:42 PM »
Awesome! I remember that feeling... it is amazing.
Keep on 401k-ing on!

Chris Pascale

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Re: Yay! I got 100% employer match in my 401k for 2020, first time for me
« Reply #7 on: January 22, 2021, 06:48:15 PM »
Truly excellent. Using those numbers you're making about 50% on day 1 of each contribution.

cool7hand

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Re: Yay! I got 100% employer match in my 401k for 2020, first time for me
« Reply #8 on: January 23, 2021, 10:34:42 AM »
Impressive. Most impressive.

ctuser1

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Re: Yay! I got 100% employer match in my 401k for 2020, first time for me
« Reply #9 on: January 23, 2021, 10:59:25 AM »
Truly excellent. Using those numbers you're making about 50% on day 1 of each contribution.
I am fortunate to have a very good employer match.

When I need to feel envious, however, I look at the old timers. Anyone who started before 2008 has a far more favorable match formula, such that they get a little over a dollar for dollar match up to the max. Imagine getting $20k employer match on a 19.5k contribution. Even with that I know an old-timer who does not max out his 401k - truly anti-mustachian!

We also have a couple of old geezers in our team who started before 1995, and they have a grandfathered defined benefit pension + they get the awesome pre-2008 match! Bloody boomers!!

MilesTeg

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Re: Yay! I got 100% employer match in my 401k for 2020, first time for me
« Reply #10 on: January 23, 2021, 03:31:58 PM »
Yes, it might sound trivial for most people on this forum, but is significant for me!

My employer's 401k does not offer true-up match. I used to max out my 401k by Sept/Oct and would lose out on the employer match portion (a few hundred bucks) every year that would have been deposited if I was still contributing to the 401k for the rest of the year.

I discovered this in 2019. Yes, the story of why I discovered it so late belongs in the "antimustachian" forum. By my calculations, my 401k/rollover-IRA balances would be several tens of thousands higher had I discovered this when I started maxing out my 401k.

Nevertheless, I took steps to remedy this for 2020. It basically involves adjusting the contribution rates precisely a couple of times - once at the beginning of the year and once after the yearly bonus. The aim is to make sure that I am contributing *at least* = monthly employer contribution amount till the very last paycheck.

Today morning, I saw the following in the 401k website (image attached):

In similar news, 2021 will be the first year my provider allows contributions to be specified in $ amounts instead of whole number percentages so this type of thing will be much easier. You might verify if you can do that with your provider and if not complain to HR.

Zamboni

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Re: Yay! I got 100% employer match in my 401k for 2020, first time for me
« Reply #11 on: January 30, 2021, 06:49:04 PM »
Great job! Don't beat yourself up over the past . . . we all have things where we could have made better choices but just didn't know.

That's a pretty sweet match!

Dicey

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Re: Yay! I got 100% employer match in my 401k for 2020, first time for me
« Reply #12 on: January 31, 2021, 12:24:24 AM »
Truly excellent. Using those numbers you're making about 50% on day 1 of each contribution.
I am fortunate to have a very good employer match.

When I need to feel envious, however, I look at the old timers. Anyone who started before 2008 has a far more favorable match formula, such that they get a little over a dollar for dollar match up to the max. Imagine getting $20k employer match on a 19.5k contribution. Even with that I know an old-timer who does not max out his 401k - truly anti-mustachian!

We also have a couple of old geezers in our team who started before 1995, and they have a grandfathered defined benefit pension + they get the awesome pre-2008 match! Bloody boomers!!
I don't get it. Why are you calling them that? And exactly how old are these "geezers"?

ctuser1

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Re: Yay! I got 100% employer match in my 401k for 2020, first time for me
« Reply #13 on: January 31, 2021, 05:56:12 AM »
Truly excellent. Using those numbers you're making about 50% on day 1 of each contribution.
I am fortunate to have a very good employer match.

When I need to feel envious, however, I look at the old timers. Anyone who started before 2008 has a far more favorable match formula, such that they get a little over a dollar for dollar match up to the max. Imagine getting $20k employer match on a 19.5k contribution. Even with that I know an old-timer who does not max out his 401k - truly anti-mustachian!

We also have a couple of old geezers in our team who started before 1995, and they have a grandfathered defined benefit pension + they get the awesome pre-2008 match! Bloody boomers!!
I don't get it. Why are you calling them that? And exactly how old are these "geezers"?

Most of these people are in their 60's.

That comment was made tongue-in-cheek. No offense intended, at least nothing that rises above bantering.

I have zero legitimate cause to be resentful of the benefits that other people receive. I have pay/benefits/wealth higher than well over 99% of the world's population. I personally dislike people who don't show gratitude for things they get from society/world/nature, so I definitely don't want to become that.

-------------------

Now, as a way of explanation why I would banter using terminology like that, that kind of reference to "boomers" is not very uncommon among younger folks!

There is a fairly strong feeling that the boomers are sucking the economy dry and leaving the husk for us. They got a cheap ride through college, one of the most powerful leverage-and-financialization-fueled stock market booms (except for the tech sector; as opposed to a broad-based productivity fueled boom during 50's and 60's), sweet pension deals, and they now sit on a massive pile of IOUs against the real economy and expect to be paid, during retirement, on the back the poorer younger workers toiling to keep the real economy going - all the while preventing the structural changes necessary to fix things by their politics! 


fuzzy math

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Re: Yay! I got 100% employer match in my 401k for 2020, first time for me
« Reply #14 on: February 02, 2021, 04:53:07 PM »
Truly excellent. Using those numbers you're making about 50% on day 1 of each contribution.
I am fortunate to have a very good employer match.

When I need to feel envious, however, I look at the old timers. Anyone who started before 2008 has a far more favorable match formula, such that they get a little over a dollar for dollar match up to the max. Imagine getting $20k employer match on a 19.5k contribution. Even with that I know an old-timer who does not max out his 401k - truly anti-mustachian!

We also have a couple of old geezers in our team who started before 1995, and they have a grandfathered defined benefit pension + they get the awesome pre-2008 match! Bloody boomers!!
I don't get it. Why are you calling them that? And exactly how old are these "geezers"?

Most of these people are in their 60's.

That comment was made tongue-in-cheek. No offense intended, at least nothing that rises above bantering.

I have zero legitimate cause to be resentful of the benefits that other people receive. I have pay/benefits/wealth higher than well over 99% of the world's population. I personally dislike people who don't show gratitude for things they get from society/world/nature, so I definitely don't want to become that.

-------------------

Now, as a way of explanation why I would banter using terminology like that, that kind of reference to "boomers" is not very uncommon among younger folks!

There is a fairly strong feeling that the boomers are sucking the economy dry and leaving the husk for us. They got a cheap ride through college, one of the most powerful leverage-and-financialization-fueled stock market booms (except for the tech sector; as opposed to a broad-based productivity fueled boom during 50's and 60's), sweet pension deals, and they now sit on a massive pile of IOUs against the real economy and expect to be paid, during retirement, on the back the poorer younger workers toiling to keep the real economy going - all the while preventing the structural changes necessary to fix things by their politics!

In your particular case, with the sweet bennies they get I can't believe they haven't fired. I think the general sentiment is that the boomers waste or dismiss that sort of thing. A lot are terrible with money (my 3 64+ yr old coworkers are at least. I've had to explain their retirement plans to them).