The Money Mustache Community
General Discussion => Throw Down the Gauntlet => Topic started by: SwordGuy on April 25, 2018, 06:57:39 PM
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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/
(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?
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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%.