Author Topic: 2018 401K limit is $18,500  (Read 2621 times)

MrDelane

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2018 401K limit is $18,500
« on: January 19, 2018, 08:18:14 AM »
The subject line pretty much says it all.
I'm assuming most of you know this already, but somehow this news slipped past me until yesterday.

The 401K contribution limit was raised $500 for 2018, for a total limit of $18,500.
I figured just in case anyone else was asleep at the wheel like I was, I'd go ahead and spread the news.

Just upped my monthly contribution $45.45 (since I missed one).
« Last Edit: January 19, 2018, 08:20:16 AM by MrDelane »

MaybeBabyMustache

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Re: 2018 401K limit is $18,500
« Reply #1 on: January 19, 2018, 09:44:50 AM »
I somehow made a typo while selecting my contribution & thought I'd max out my 401K with my bonus. Imagine my disappointment when I saw I was at 10% of my contribution! Luckily, fixing it is easy & I'll be maxed out by the end of February. But, it does help to pay attention. Thanks for the reminder on the increase!

hadabeardonce

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Re: 2018 401K limit is $18,500
« Reply #2 on: January 19, 2018, 11:12:18 AM »
This IRS page has a lot of good info: https://www.irs.gov/retirement-plans/how-much-salary-can-you-defer-if-youre-eligible-for-more-than-one-retirement-plan

Common knowledge $18,500 ($24,500 if over age 50) limit
403b participants may also be able to take advantage of the "15-years of service" rule to contribute an extra $3,000
457 plans have the same $18,500 ($24,500 if over age 50) limit, but it's separate so you can contribute to both for a combined $37,000 ($49,000 if over age 50) limit

The limitation for defined contribution plans under Section 415(c)(1)(A) is increased in 2018 from $54,000 to $55,000 (or $61,000 if over age 50)

and then Roth IRAs are separate... the above contributions can lower your MAGI to allow for contributions if needed. $5,500 (or $6,500 if over age 50)

Check with your payroll department to see if these options are available to you.
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OurTown

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Re: 2018 401K limit is $18,500
« Reply #3 on: January 19, 2018, 11:52:38 AM »
Take it
To the limit
One more time

Bateaux

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Re: 2018 401K limit is $18,500
« Reply #4 on: January 19, 2018, 11:52:51 PM »
Going to be rockin $24,500 for the first time this year and $6,500 into Roth.   Times two. 
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Davids

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Re: 2018 401K limit is $18,500
« Reply #5 on: January 21, 2018, 07:26:08 AM »
I always readjust my 401K contribution percentage in April after I receive my base pay increase and bonus because then I will know what I need to contribute the rest of the way for the MAX.

MrUpwardlyMobile

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Re: 2018 401K limit is $18,500
« Reply #6 on: January 21, 2018, 07:32:42 AM »
I always readjust my 401K contribution percentage in April after I receive my base pay increase and bonus because then I will know what I need to contribute the rest of the way for the MAX.
I have to adjust quarterly based upon bonuses and fee sharing throughout the year.  I dread accidentally over contributing to my 401k
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mies

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Re: 2018 401K limit is $18,500
« Reply #7 on: January 21, 2018, 12:50:48 PM »
Another option is doing a specific dollar amount contribution. Iím doing that this year. Iím going to contribute $1000 for the first 14 pay periods, then do $375 for the final 12. Iím hourly and Iím eligible for overtime, profit sharing, and potential performance bonuses, so I never know what my exact gross income for the year will be. Plus, I donít have to worry about over contributing.
Less is more.

Mika M

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Re: 2018 401K limit is $18,500
« Reply #8 on: February 12, 2018, 02:24:46 PM »
Yay!
Lazy Frugal

Mr. JL

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Re: 2018 401K limit is $18,500
« Reply #9 on: February 12, 2018, 03:28:40 PM »
Quote
457 plans have the same $18,500 ($24,500 if over age 50) limit, but it's separate so you can contribute to both for a combined $37,000 ($49,000 if over age 50) limit

Holy crap I've been contributing to a Roth and a 457 for 14 years and never realized I could max out both accounts!  I was told by my tax accountant that the contribution limit was for both accounts combined.  I took him at his word and never looked into it. 

Proud Foot

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Re: 2018 401K limit is $18,500
« Reply #10 on: February 13, 2018, 08:39:09 AM »
MrUpwardMobile and Mies, do you work for really small companies or is your HR/Payroll just crap? Any decent payroll system will cap the 401k contributions and not allow you to over contribute.

mies

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Re: 2018 401K limit is $18,500
« Reply #11 on: February 13, 2018, 09:31:18 AM »
I actually donít have to worry about over contributing. My HR department can catch that and prevent it. Iím trying to front load my contributions this year, but I have to contribute every pay in order to get the employer match which is why I figured out the amounts that get nice whole number contributions.
« Last Edit: February 13, 2018, 12:30:00 PM by mies »
Less is more.

Valhalla

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Re: 2018 401K limit is $18,500
« Reply #12 on: February 13, 2018, 11:32:17 AM »
This is good news.

I worked for a company where they paid 2 weeks in arrears.  That messed me up big time.  I had my calculations lined up for every pay period to the end of the year, but the 12/31 payroll and paycheck was paid out on 1/15 of the following year, causing me to under-contribute... was really ticked at that!!

It should be painless and brainless to contribute the max to your 401k... sadly it does take work to review this regularly to make sure you stay on top of it.
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dandarc

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Re: 2018 401K limit is $18,500
« Reply #13 on: February 13, 2018, 11:47:49 AM »
Quote
457 plans have the same $18,500 ($24,500 if over age 50) limit, but it's separate so you can contribute to both for a combined $37,000 ($49,000 if over age 50) limit

Holy crap I've been contributing to a Roth and a 457 for 14 years and never realized I could max out both accounts!  I was told by my tax accountant that the contribution limit was for both accounts combined.  I took him at his word and never looked into it.
Breaks down like this for typical situations where you see a 457:
457B is a separate $18,500 bucket

401K or 403B - Another $18,500 bucket.  This one is combined for all 401K/403B's but is separate from the 457 bucket.

IRAs - $5500 bucket separate from all of the above.

So you could do
$42,500 maxing all of the above.  Plus an HSA if your health insurance allows.  And a SEP-IRA if you have a side business.  Plus various catch-up contributions if you're 50 or older.  Really the government wants you to get rich - shame more people don't take advantage of it.

hadabeardonce

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Re: 2018 401K limit is $18,500
« Reply #14 on: February 13, 2018, 12:19:45 PM »
Quote
457 plans have the same $18,500 ($24,500 if over age 50) limit, but it's separate so you can contribute to both for a combined $37,000 ($49,000 if over age 50) limit

Holy crap I've been contributing to a Roth and a 457 for 14 years and never realized I could max out both accounts!  I was told by my tax accountant that the contribution limit was for both accounts combined.  I took him at his word and never looked into it.
Breaks down like this for typical situations where you see a 457:
457B is a separate $18,500 bucket

401K or 403B - Another $18,500 bucket.  This one is combined for all 401K/403B's but is separate from the 457 bucket.

IRAs - $5500 bucket separate from all of the above.

So you could do
$42,500 maxing all of the above.  Plus an HSA if your health insurance allows.  And a SEP-IRA if you have a side business.  Plus various catch-up contributions if you're 50 or older.  Really the government wants you to get rich - shame more people don't take advantage of it.

Break it down: https://www.youtube.com/watch?v=05xnAyxJCwY
Standard advice: Read "Your Money or Your Life" and "A Random Walk Down Wall Street"

terran

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Re: 2018 401K limit is $18,500
« Reply #15 on: February 13, 2018, 12:27:26 PM »
Quote
457 plans have the same $18,500 ($24,500 if over age 50) limit, but it's separate so you can contribute to both for a combined $37,000 ($49,000 if over age 50) limit

Holy crap I've been contributing to a Roth and a 457 for 14 years and never realized I could max out both accounts!  I was told by my tax accountant that the contribution limit was for both accounts combined.  I took him at his word and never looked into it.
Breaks down like this for typical situations where you see a 457:
457B is a separate $18,500 bucket

401K or 403B - Another $18,500 bucket.  This one is combined for all 401K/403B's but is separate from the 457 bucket.

IRAs - $5500 bucket separate from all of the above.

So you could do
$42,500 maxing all of the above.  Plus an HSA if your health insurance allows.  And a SEP-IRA if you have a side business.  Plus various catch-up contributions if you're 50 or older.  Really the government wants you to get rich - shame more people don't take advantage of it.

Some employers also have mandatory contributions which are separate from the $18500 limit (but included in the $55k limit). And then there's always the plans that allow mega backdoor roth contributions (after-tax contributions + in service rollovers or withdrawals into roth 403b/401k or roth IRA). All in (including employer match) that's $55000 403b/401k + $18500 457 + $5500 IRA = $79000. And that's before you figure in what a spouse might have access to.

mm1970

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Re: 2018 401K limit is $18,500
« Reply #16 on: February 13, 2018, 12:58:00 PM »
I got a raise whee!!

To the worst possible point, right at the HCE limit.  So I have to reduce my 401k contributions to 5%.

I haven't done it yet.  I'm trying to figure out how to ask my boss to cut my salary by $500.  I tried the person who does the timecards and paychecks.  "Can you just delay my last paycheck, or cut it back?"  She looked at me strangely and said no.

The sucky thing about it all is that they managed to turn a $7k raise into about $1400 take home because of the loss in tax sheltered 401k.

dandarc

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Re: 2018 401K limit is $18,500
« Reply #17 on: February 13, 2018, 01:00:52 PM »
that sucks mm1970.  "I'd like a $500 cut or another $5,000 raise" probably confuses everyone.

Heck, most probably think being just barely a highly compensated employee is a good thing.

mm1970

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Re: 2018 401K limit is $18,500
« Reply #18 on: February 13, 2018, 01:13:47 PM »
that sucks mm1970.  "I'd like a $500 cut or another $5,000 raise" probably confuses everyone.

Heck, most probably think being just barely a highly compensated employee is a good thing.
My (new) boss thought I already was.  It just goes to show once you are above the IRS Social security cap (which is above the HCE limit), you are pretty oblivious to those below you.

Valhalla

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Re: 2018 401K limit is $18,500
« Reply #19 on: February 13, 2018, 01:17:19 PM »
that sucks mm1970.  "I'd like a $500 cut or another $5,000 raise" probably confuses everyone.

Heck, most probably think being just barely a highly compensated employee is a good thing.
I used to work in silicon valley.  Every one was a HCE, but most people didn't contribute to the 401k.  I was shocked when I found this out.  We didn't pass the HCE test and I had to withdraw some of my 401k contributions... talk about being mad!!
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mm1970

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Re: 2018 401K limit is $18,500
« Reply #20 on: February 13, 2018, 01:43:25 PM »
that sucks mm1970.  "I'd like a $500 cut or another $5,000 raise" probably confuses everyone.

Heck, most probably think being just barely a highly compensated employee is a good thing.
I used to work in silicon valley.  Every one was a HCE, but most people didn't contribute to the 401k.  I was shocked when I found this out.  We didn't pass the HCE test and I had to withdraw some of my 401k contributions... talk about being mad!!
I'm fairly confident that I was probably the ONLY non-HCE in our company putting in the max.  So with me moving categories...all the HCE's are going to be SUPER screwed this year.

neil

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Re: 2018 401K limit is $18,500
« Reply #21 on: February 13, 2018, 02:21:14 PM »
I left my contribution the same.  (50%!)  Last year was the first year I did this and I guess it worked out.

A lot of my bonus money comes in the end of January.  I guess for now that was a top.  Oh well.  :P

MayDay

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Re: 2018 401K limit is $18,500
« Reply #22 on: February 13, 2018, 04:00:23 PM »
My H was a HCE just once. Iand it barely affected him as his contribution was just a touch over the new HCE max.

But then the next year (and every year since) he wasn't a HCE.

Annoying.
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