Author Topic: Go for 2+ 401Ks!!!  (Read 685 times)

SwordGuy

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Go for 2+ 401Ks!!!
« on: April 25, 2018, 06:57:39 PM »
This was a very interesting article.   You can have more than one 401K if you have more than one employer.   Employees have a maximum limit they can put into 401Ks, which can't be gone above regardless of the number of 401ks.

However -- and this is a big However -- Employer match contributions don't work like that.  Each "unrelated" employer is considered a separate bucket for contribution limits.

If each of two employers matched up to 4%, you would make more money by putting 4% into each 401k instead of 8% into one of them.   It's like double free money!

https://www.whitecoatinvestor.com/multiple-401k-rules/


Now, to me, this is where things get interesting.   What if one of my employers is myself?   If my side gig produced enough income I could potentially put tens of thousands more into my personal 401k.   

I'm still researching the employer side of the contributions, but at first glance that looks possible.

I wish I had known that earlier!   

What I specifically want to know is if an employer can put in their max contribution if you just get paid $1 from them for the year.  If not, how close to that optimal situation can we get?

Anyone else interested in helping explore this?

Aunt Petunia

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Re: Go for 2+ 401Ks!!!
« Reply #1 on: April 25, 2018, 07:37:32 PM »
My example isn't as big as these guys but I have a 401a for my side gig that doesn't count towards the 18.5k contribution limit. I contribute 4.5% and they contribute 6%.