Maxed out 401K

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Topic Author
jaymeetme
Posts: 17
Joined: Wed May 08, 2019 1:44 pm

Maxed out 401K

Post by jaymeetme » Fri Sep 27, 2019 9:14 am

Hello Experts,

I have maxed out my 401K for 2019 but my wife's 401K account has more than around 10K left to max out. Now that I will get more money in my paycheck I have few questions on it.

1) What happens to my 401K employer match money for remaining 2019 paychecks since I can't contribute to 401K?

2) is it possible that I can transfer this extra money to my wife so she can contribute to her 401K? I am just trying to find out if there is a way to contribute to 401K other than paycheck contribution.

terran
Posts: 1018
Joined: Sat Jan 10, 2015 10:50 pm

Re: Maxed out 401K

Post by terran » Fri Sep 27, 2019 9:21 am

1. That depends. Some employers will "true up" the match at the end of the year buy giving you the match on the full amount you contributed even though you didn't contribute for the whole year, others won't. It's too late now, of course, but you should get an answer to that before you do the same next year.

2) No, you can only contribute to a 401(k) through payroll contributions, so if your wife makes under $10k for the rest of the year (actually somewhat more to cover mandatory deductions like FICA) she won't be able to max. Just have her set her 401(k) deduction as high as they'll let her.

Next year I would plan on just setting both your deductions to max your respective 401(k)s throughout the year to avoid both of these issues.

Topic Author
jaymeetme
Posts: 17
Joined: Wed May 08, 2019 1:44 pm

Re: Maxed out 401K

Post by jaymeetme » Fri Sep 27, 2019 9:36 am

Thank you for your response. Appreciate it!

TheHouse7
Posts: 512
Joined: Fri Jan 13, 2017 2:40 am
Location: Washington State

Re: Maxed out 401K

Post by TheHouse7 » Fri Sep 27, 2019 2:41 pm

terran wrote:
Fri Sep 27, 2019 9:21 am
1. That depends. Some employers will "true up" the match at the end of the year buy giving you the match on the full amount you contributed even though you didn't contribute for the whole year, others won't. It's too late now, of course, but you should get an answer to that before you do the same next year.

2) No, you can only contribute to a 401(k) through payroll contributions, so if your wife makes under $10k for the rest of the year (actually somewhat more to cover mandatory deductions like FICA) she won't be able to max. Just have her set her 401(k) deduction as high as they'll let her.

Next year I would plan on just setting both your deductions to max your respective 401(k)s throughout the year to avoid both of these issues.
+1 call admin to check for the "true up" benefit and then try to find that money after the fact! :annoyed
"PSX will always go up 20%, why invest in anything else?!" -Father-in-law early retired.

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Wiggums
Posts: 1900
Joined: Thu Jan 31, 2019 8:02 am

Re: Maxed out 401K

Post by Wiggums » Fri Sep 27, 2019 6:53 pm

My old company would allow you to contribute any amount per paycheck up to the IRS limit.

The new company has a contribution limit per paycheck and will only match with the payroll. So it’s best to contribute via a payroll deduction all year long.

psy1
Posts: 96
Joined: Thu Jan 31, 2019 1:40 am

Re: Maxed out 401K

Post by psy1 » Fri Sep 27, 2019 7:29 pm

You have to read the fine print on employer matches. Where I used to work, I would sometimes contribute 50% of my check to 401k until maxed. Doing so, I inadvertently lost some of the match. The way the employer had it spelled out, to max the match I would have had to save the same amount on each of 26 pay periods. I still got some of the match, but not all.

So it is not always true that matching X% of employee contributions up to a max works on an annual basis - more of a per paycheck basis.

BernardShakey
Posts: 31
Joined: Tue Jun 25, 2019 10:52 pm

Re: Maxed out 401K

Post by BernardShakey » Fri Sep 27, 2019 9:03 pm

Yes, mine is on a paycheck to paycheck basis. And one year I did hit that 56K limit or whatever it was back then and lost the match on my last couple paychecks. Some megacorps have a supplemental plan for folks making over a certain amount and it serves as a "spillover" account in the event you hit the IRS contribution limit. You usually have to sign up about this time of year for the following year. They are often "unqualified" plans and don't have all the same protections from creditors as your 401k but will keep you from ever missing match dollars.

Hope you get your match...

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