max 401k in first 3 months?

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bogleblitz
Posts: 506
Joined: Mon Oct 01, 2012 2:51 pm

max 401k in first 3 months?

Post by bogleblitz »

Should I max my 401k $17500 contribution in the first 3 months or spread throughout 1 year? I have the extra money sitting in high yield bank account.
I been reading a lot of threads where people contribute to Roth right away on Jan 1st and the advantages of lump sum.

Thanks in advance.
sunnyday
Posts: 1679
Joined: Sat Jul 16, 2011 8:48 am

Re: max 401k in first 3 months?

Post by sunnyday »

I think it's fine to max it out early assuming you don't get a company match and are not planning to change jobs.
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steve r
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Joined: Mon Feb 13, 2012 7:34 pm
Location: Connecticut

Re: max 401k in first 3 months?

Post by steve r »

One advantage of a Roth is that you can reverse your decision latter in the year (say if you lose your job or something causes a need for money).

That said, if you have job security I see no reason why not to move ahead.
"Owning the stock market over the long term is a winner's game. Attempting to beat the market is a loser's game. ..Don't look for the needle in the haystack. Just buy the haystack." Jack Bogle
TS1
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Joined: Fri Dec 14, 2012 5:21 pm

Re: max 401k in first 3 months?

Post by TS1 »

If you have a match that is affected by whether you contribute in each paycheck, you can still front-load most of it and then leave just enough to be spread over the remaining paychecks and get the match.

Regarding changing jobs, this works out fine because in that situation you would want to have some 401k space left in order to get a match at your new job, but you would not want too much because you might not be eligible for the new 401k until you had worked 6 months or a year.
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