Who missed out on maximizing 401k?

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boglechu
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Who missed out on maximizing 401k?

Post by boglechu » Tue Dec 19, 2017 12:49 pm

I miscalculated and only contributed $17980. $20 short. :beer

Grt2bOutdoors
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Re: Who missed out on maximizing 401k?

Post by Grt2bOutdoors » Tue Dec 19, 2017 12:50 pm

The way to avoid this going forward is to use a percentage that may amount to be slightly above $18K. The employer system will automatically cut off at the maximum permitted by law.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

WL2034
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Re: Who missed out on maximizing 401k?

Post by WL2034 » Tue Dec 19, 2017 12:52 pm

All is not lost, you still have 12 more days in 2017. I strongly advise you to contribute that last $20 or you may never be able to retire. :wink:

boglechu
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Re: Who missed out on maximizing 401k?

Post by boglechu » Tue Dec 19, 2017 1:02 pm

Grt2bOutdoors wrote:
Tue Dec 19, 2017 12:50 pm
The way to avoid this going forward is to use a percentage that may amount to be slightly above $18K. The employer system will automatically cut off at the maximum permitted by law.
Thanks for that tip! I was trying to do the percentages right but couldn’t get to work. Need3; to pay myself $250 more to get the last $20 into 401k or raise the percentage. After taxes, the $20 will be good enough for a burger and drink. Lol

Grt2bOutdoors
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Re: Who missed out on maximizing 401k?

Post by Grt2bOutdoors » Tue Dec 19, 2017 1:06 pm

boglechu wrote:
Tue Dec 19, 2017 1:02 pm
Grt2bOutdoors wrote:
Tue Dec 19, 2017 12:50 pm
The way to avoid this going forward is to use a percentage that may amount to be slightly above $18K. The employer system will automatically cut off at the maximum permitted by law.
Thanks for that tip! I was trying to do the percentages right but couldn’t get to work. Need3; to pay myself $250 more to get the last $20 into 401k or raise the percentage. After taxes, the $20 will be good enough for a burger and drink. Lol
Raise the percentage now, you may be able to bank the $20 before the year is up.
Go to Burger King, value meal - $3.49, keep the change.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

Engineer250
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Re: Who missed out on maximizing 401k?

Post by Engineer250 » Tue Dec 19, 2017 1:14 pm

Grt2bOutdoors wrote:
Tue Dec 19, 2017 12:50 pm
The way to avoid this going forward is to use a percentage that may amount to be slightly above $18K. The employer system will automatically cut off at the maximum permitted by law.
Does every employer do this though?

But I did call Vanguard (who runs my company's 401k) and confirmed they will do this. Unfortunately I was nowhere near the max this year but hope to be for next year so was planning ahead.
Where the tides of fortune take us, no man can know.

Grt2bOutdoors
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Re: Who missed out on maximizing 401k?

Post by Grt2bOutdoors » Tue Dec 19, 2017 1:19 pm

Engineer250 wrote:
Tue Dec 19, 2017 1:14 pm
Grt2bOutdoors wrote:
Tue Dec 19, 2017 12:50 pm
The way to avoid this going forward is to use a percentage that may amount to be slightly above $18K. The employer system will automatically cut off at the maximum permitted by law.
Does every employer do this though?

But I did call Vanguard (who runs my company's 401k) and confirmed they will do this. Unfortunately I was nowhere near the max this year but hope to be for next year so was planning ahead.
I can not comment on every employer's plan, the IRS is firm in what is permitted to be contributed pre-tax by plan. Violations are dealt with via forms of penalties on employer. Thus, my belief is that 401k plan systems have a fail-safe mechanism to prevent over contributing on a pre-tax basis. It will just stop accepting any additions after the maximum permitted by law has been reached.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

Grogs
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Re: Who missed out on maximizing 401k?

Post by Grogs » Tue Dec 19, 2017 1:57 pm

Grt2bOutdoors wrote:
Tue Dec 19, 2017 1:19 pm
Engineer250 wrote:
Tue Dec 19, 2017 1:14 pm
Grt2bOutdoors wrote:
Tue Dec 19, 2017 12:50 pm
The way to avoid this going forward is to use a percentage that may amount to be slightly above $18K. The employer system will automatically cut off at the maximum permitted by law.
Does every employer do this though?

But I did call Vanguard (who runs my company's 401k) and confirmed they will do this. Unfortunately I was nowhere near the max this year but hope to be for next year so was planning ahead.
I can not comment on every employer's plan, the IRS is firm in what is permitted to be contributed pre-tax by plan. Violations are dealt with via forms of penalties on employer. Thus, my belief is that 401k plan systems have a fail-safe mechanism to prevent over contributing on a pre-tax basis. It will just stop accepting any additions after the maximum permitted by law has been reached.
The key word there is "pre-tax". My plan will just keep going after $18k, and any amount above that limit goes into the after-tax bucket. This year my closest options to $18k we're $10 under or $80 over, so I chose the former. My contribution will be $17,990.

le_sacre
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Re: Who missed out on maximizing 401k?

Post by le_sacre » Tue Dec 19, 2017 2:18 pm

I may or may not. I started a job mid-year that marked the first time I've had a 401k available (though I'm sure my 6 years of startup equity will turn to solid gold any day now), so I've been rushing to try to max out over not many pay cycles. But our system (with JP Morgan) is so slow to respond to election changes! It's been a see-saw of me updating the contribution amount based on calculating to max out (go a bit over) on the last paycheck, seeing that the change didn't take effect in time for the next paycheck, making another calculation and another adjustment, again seeing it not take effect in time... Our payroll is bimonthly and that seems *just* not quite enough time for a change made on one payday to take effect on the next one.

Which is a bit shocking to me. But in the new year we're switching to Fidelity, so I hope that's better. Though the possibly 8-week "blackout period" before we can adjust contributions, rebalance, or even see our accounts doesn't inspire confidence.

runner3081
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Re: Who missed out on maximizing 401k?

Post by runner3081 » Tue Dec 19, 2017 2:34 pm

On a related note, for some bi-weekly pay folks, there could be 27 checks in 2018.

Make sure to lower your contribution % to ensure you maximize the match and don't hit 18.5 early.

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DaftInvestor
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Re: Who missed out on maximizing 401k?

Post by DaftInvestor » Tue Dec 19, 2017 2:36 pm

The challenge I have is that my company only matches so much per quarter - if I contribute to early I miss all of my Q4 company match - but I don't want to contribute too little to hit the max.

Longdog
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Re: Who missed out on maximizing 401k?

Post by Longdog » Tue Dec 19, 2017 2:56 pm

No doubt you will regret this oversight for the rest of your life. Or at least every time, in retirement, you have an unexpected $20 expense. :)

I created a spreadsheet that allows me to adjust my contribution amounts through the year, to adjust for my raise and the variable amount of quarterly bonuses. I occasionally update the spreadsheet when the variable items become known, and use it in such a way that my last month's contributions, if uncapped, would put me just a smidgen over the maximum. The company caps it at the maximum.
Steve

ThankYouJack
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Re: Who missed out on maximizing 401k?

Post by ThankYouJack » Tue Dec 19, 2017 3:01 pm

I missed out by a few thousand because of a change in employment and delays with our paychecks going through. I feel every American owes me a thank you for helping pay extra towards our national debt :D

22twain
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Re: Who missed out on maximizing 401k?

Post by 22twain » Tue Dec 19, 2017 4:37 pm

At my former employer, we had to specify our 403(b) deferral as a monthly dollar amount. I was always too lazy to tweak it for just one month, so during the time when I was maxing it out, I was actually $0.04 short per year. :annoyed

Ostentatious
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Re: Who missed out on maximizing 401k?

Post by Ostentatious » Tue Dec 19, 2017 4:54 pm

I reached the max one paycheck before the last so I left about $164 on the table and my employer said they won't help to fix that "\ :oops:

crake
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Re: Who missed out on maximizing 401k?

Post by crake » Tue Dec 19, 2017 4:58 pm

Keep in mind that next year the limit will be 18500. Bump up your percentage now. The change might go through before the end of the year getting you that extra 20 and you'll be ready for next year.

kappy
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Re: Who missed out on maximizing 401k?

Post by kappy » Tue Dec 19, 2017 7:47 pm

I hit 18k the first week of December. I realized my paystub correctly reflects hitting the max and the rest going into post tax but Fidelity somehow allowed all that money to go into my pre-tax 401k. Still waiting for a call back from them letting me know how they are correcting the situation :oops:

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BogleFanGal
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Re: Who missed out on maximizing 401k?

Post by BogleFanGal » Tue Dec 19, 2017 8:02 pm

Wow - this thread hit a nerve. LOL. I totally messed up the math this year :oops: - or should I say my spouse's HR dept messed it up. Handed us a 2017 pay period calendar and told us to max 2017 by dividing contributions among all pay periods equally.

Found out too late they were wrong. Last pay period counts as 2018, not 2017. (I was asking about this in another thread) We missed 18k which also cost us the full 6k catchup deduction, since that requires maxing 18k first. Painful.
Last edited by BogleFanGal on Tue Dec 19, 2017 8:24 pm, edited 1 time in total.

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Fudgie
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Re: Who missed out on maximizing 401k?

Post by Fudgie » Tue Dec 19, 2017 8:05 pm

This Friday I'll hit about $17, 980 for the year. As other posters wrote, I was worried about going over. I really need to pick up the phone and ask if they will automatically cut it off at $18K.
"That's entertainment!" - Vlad the Impaler

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AndrewXnn
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Re: Who missed out on maximizing 401k?

Post by AndrewXnn » Tue Dec 19, 2017 8:07 pm

AFAIK; Maximum allocation to a 401k in 2017 is $60,000. That includes $18,000 pretax, $6000 catch up and $36,000 everything else.

In 2018, the Maximum will be $61,000. $18,500, $6,000 and $36,500 everything else.

https://www.irs.gov/retirement-plans/pl ... ion-limits

I did not miss out.
Last edited by AndrewXnn on Tue Dec 19, 2017 9:48 pm, edited 1 time in total.

tibbitts
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Re: Who missed out on maximizing 401k?

Post by tibbitts » Tue Dec 19, 2017 8:13 pm

Grt2bOutdoors wrote:
Tue Dec 19, 2017 1:19 pm
Engineer250 wrote:
Tue Dec 19, 2017 1:14 pm
Grt2bOutdoors wrote:
Tue Dec 19, 2017 12:50 pm
The way to avoid this going forward is to use a percentage that may amount to be slightly above $18K. The employer system will automatically cut off at the maximum permitted by law.
Does every employer do this though?

But I did call Vanguard (who runs my company's 401k) and confirmed they will do this. Unfortunately I was nowhere near the max this year but hope to be for next year so was planning ahead.
I can not comment on every employer's plan, the IRS is firm in what is permitted to be contributed pre-tax by plan. Violations are dealt with via forms of penalties on employer. Thus, my belief is that 401k plan systems have a fail-safe mechanism to prevent over contributing on a pre-tax basis. It will just stop accepting any additions after the maximum permitted by law has been reached.
Sometimes, employers will cut you off well before you hit the max - and you won't know until it's probably too late to fix the problem.

Grt2bOutdoors
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Re: Who missed out on maximizing 401k?

Post by Grt2bOutdoors » Tue Dec 19, 2017 8:45 pm

tibbitts wrote:
Tue Dec 19, 2017 8:13 pm
Grt2bOutdoors wrote:
Tue Dec 19, 2017 1:19 pm
Engineer250 wrote:
Tue Dec 19, 2017 1:14 pm
Grt2bOutdoors wrote:
Tue Dec 19, 2017 12:50 pm
The way to avoid this going forward is to use a percentage that may amount to be slightly above $18K. The employer system will automatically cut off at the maximum permitted by law.
Does every employer do this though?

But I did call Vanguard (who runs my company's 401k) and confirmed they will do this. Unfortunately I was nowhere near the max this year but hope to be for next year so was planning ahead.
I can not comment on every employer's plan, the IRS is firm in what is permitted to be contributed pre-tax by plan. Violations are dealt with via forms of penalties on employer. Thus, my belief is that 401k plan systems have a fail-safe mechanism to prevent over contributing on a pre-tax basis. It will just stop accepting any additions after the maximum permitted by law has been reached.
Sometimes, employers will cut you off well before you hit the max - and you won't know until it's probably too late to fix the problem.
I believe that is usually related to being a highly compensated employee in the eyes of the employer where there is no provision in the form of a safe harbor.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

CyberGuy
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Re: Who missed out on maximizing 401k?

Post by CyberGuy » Tue Dec 19, 2017 9:18 pm

Paid down the last of my credit card debt this year and then set myself up to be used to the smaller paychecks. I'm currently contributing max but will only hit ~11,000 for this year.

Note: just found bogleheads and MMM this past year. I've been paying down debt (credit card and student loans) for most of this year. Trying hard to get myself back to even. Should be a good year next year...

CyberGuy
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Re: Who missed out on maximizing 401k?

Post by CyberGuy » Tue Dec 19, 2017 9:20 pm

also fwiw,

I work for a mega-corp and can confirm that they automatically cap you at the maximum contribution for the year. I took the time to ask HR a month ago.

wordsmith11
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Re: Who missed out on maximizing 401k?

Post by wordsmith11 » Tue Dec 19, 2017 10:36 pm

kappy wrote:
Tue Dec 19, 2017 7:47 pm
I hit 18k the first week of December. I realized my paystub correctly reflects hitting the max and the rest going into post tax but Fidelity somehow allowed all that money to go into my pre-tax 401k. Still waiting for a call back from them letting me know how they are correcting the situation :oops:
I'm confused by your "post-tax" reference...I thought the total someone under 50 can contribute to a 401(k) is $18,000 period, whether regular or Roth 401(k)? What am I missing?

ERISA Stone
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Re: Who missed out on maximizing 401k?

Post by ERISA Stone » Tue Dec 19, 2017 10:56 pm

Grt2bOutdoors wrote:
Tue Dec 19, 2017 1:19 pm
Engineer250 wrote:
Tue Dec 19, 2017 1:14 pm
Grt2bOutdoors wrote:
Tue Dec 19, 2017 12:50 pm
The way to avoid this going forward is to use a percentage that may amount to be slightly above $18K. The employer system will automatically cut off at the maximum permitted by law.
Does every employer do this though?

But I did call Vanguard (who runs my company's 401k) and confirmed they will do this. Unfortunately I was nowhere near the max this year but hope to be for next year so was planning ahead.
I can not comment on every employer's plan, the IRS is firm in what is permitted to be contributed pre-tax by plan. Violations are dealt with via forms of penalties on employer. Thus, my belief is that 401k plan systems have a fail-safe mechanism to prevent over contributing on a pre-tax basis. It will just stop accepting any additions after the maximum permitted by law has been reached.
There is no penalty for the employer as long as the excess is distributed timely, 4/15 of the following year for calendar year plans.

TropikThunder
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Re: Who missed out on maximizing 401k?

Post by TropikThunder » Wed Dec 20, 2017 12:52 am

wordsmith11 wrote:
Tue Dec 19, 2017 10:36 pm
kappy wrote:
Tue Dec 19, 2017 7:47 pm
I hit 18k the first week of December. I realized my paystub correctly reflects hitting the max and the rest going into post tax but Fidelity somehow allowed all that money to go into my pre-tax 401k. Still waiting for a call back from them letting me know how they are correcting the situation :oops:
I'm confused by your "post-tax" reference...I thought the total someone under 50 can contribute to a 401(k) is $18,000 period, whether regular or Roth 401(k)? What am I missing?
The tax law allows total contributions above the "normal" $18,000 in the form of profit sharing etc. Only the first $18,000 is pre-tax. The amount above $18k is after-tax but not Roth since it will be taxed on distribution.

TropikThunder
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Re: Who missed out on maximizing 401k?

Post by TropikThunder » Wed Dec 20, 2017 12:58 am

tibbitts wrote:
Tue Dec 19, 2017 8:13 pm
Sometimes, employers will cut you off well before you hit the max - and you won't know until it's probably too late to fix the problem.
I find it especially egregious when an employer puts a % cap on your salary reduction, and that cap x your salary is less than $18,000. I've read comments on here from people who worked for a Megacorp which limited their deferrals to say 20% of salary, meaning no one earning less than $100,000 could max it out.

TropikThunder
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Re: Who missed out on maximizing 401k?

Post by TropikThunder » Wed Dec 20, 2017 1:00 am

BogleFanGal wrote:
Tue Dec 19, 2017 8:02 pm
Wow - this thread hit a nerve. LOL. I totally messed up the math this year :oops: - or should I say my spouse's HR dept messed it up. Handed us a 2017 pay period calendar and told us to max 2017 by dividing contributions among all pay periods equally.

Found out too late they were wrong. Last pay period counts as 2018, not 2017. (I was asking about this in another thread) We missed 18k which also cost us the full 6k catchup deduction, since that requires maxing 18k first. Painful.
How do you not have a paycheck still left in 2017? Is it a 1st-and-15th pay period cycle?

Engineer250
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Re: Who missed out on maximizing 401k?

Post by Engineer250 » Wed Dec 20, 2017 1:43 am

TropikThunder wrote:
Wed Dec 20, 2017 12:58 am
tibbitts wrote:
Tue Dec 19, 2017 8:13 pm
Sometimes, employers will cut you off well before you hit the max - and you won't know until it's probably too late to fix the problem.
I find it especially egregious when an employer puts a % cap on your salary reduction, and that cap x your salary is less than $18,000. I've read comments on here from people who worked for a Megacorp which limited their deferrals to say 20% of salary, meaning no one earning less than $100,000 could max it out.
Mine limits to 15% for highly compensated employees, those making $120k or more. I'm not sure why, maybe they don't want them front loading. My plan seems to meet all the safe harbor provisions as well. And after tax is limited to 50% for HCEs. Again not sure why (since that would put you over) but maybe it's to keep them from maxing out early, I don't know.
Where the tides of fortune take us, no man can know.

MrsRoos
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Re: Who missed out on maximizing 401k?

Post by MrsRoos » Wed Dec 20, 2017 2:30 am

I work for a mid-sized company and our 401k is with Fidelity. I, too, can confirm that contributions to the 401k gets cutoff once you hit the IRS limit.

I've also readjusted my contribution percentage for the $500 increase and a mid-year pay raise.
“Anyone who believes in indefinite growth in anything physical, on a physically finite planet, is either mad or an economist.” - Kenneth Boulding

shess
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Re: Who missed out on maximizing 401k?

Post by shess » Wed Dec 20, 2017 3:37 am

boglechu wrote:
Tue Dec 19, 2017 12:49 pm
I miscalculated and only contributed $17980. $20 short. :beer
A few years back my employer had the ability to make after-tax contributions convertible to Roth (aka "mega backdoor"). I was lazy, and didn't change my election until pretty late in the year. They helpfully allowed me to set 100% contributions, but that was after taxes, so it looked like I wasn't _quite_ going to max things out. I was sad!

Then for no particular reason, a couple people I had helped out with some technical problems each sent me a spot bonus, and the couple hundred extra dollars put me over the top. So happy!

ERISA Stone
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Re: Who missed out on maximizing 401k?

Post by ERISA Stone » Wed Dec 20, 2017 8:31 am

Engineer250 wrote:
Wed Dec 20, 2017 1:43 am
TropikThunder wrote:
Wed Dec 20, 2017 12:58 am
tibbitts wrote:
Tue Dec 19, 2017 8:13 pm
Sometimes, employers will cut you off well before you hit the max - and you won't know until it's probably too late to fix the problem.
I find it especially egregious when an employer puts a % cap on your salary reduction, and that cap x your salary is less than $18,000. I've read comments on here from people who worked for a Megacorp which limited their deferrals to say 20% of salary, meaning no one earning less than $100,000 could max it out.
Mine limits to 15% for highly compensated employees, those making $120k or more. I'm not sure why, maybe they don't want them front loading. My plan seems to meet all the safe harbor provisions as well. And after tax is limited to 50% for HCEs. Again not sure why (since that would put you over) but maybe it's to keep them from maxing out early, I don't know.
The reason to cap HCEs is to help with passing nondiscrimination testing. However, in your case above, your company seems to ignore that by allowing after-tax contributions. Allowing HCEs to contribute up to 50% in after-tax contributions can have a much greater effect on nondiscrimination than the 15% deferral limit.

Njm8845
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Re: Who missed out on maximizing 401k?

Post by Njm8845 » Wed Dec 20, 2017 8:55 am

My 401k caps contributions and sends back anything over the limit.

It also has a true up, so I’m never concerned about maxing out too early.

I’m always surprised that so many other plans are seemingly NOT like mine.... so much to worry about!

keystone
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Re: Who missed out on maximizing 401k?

Post by keystone » Wed Dec 20, 2017 8:56 am

I instructed my employer to do bi-weekly deductions of $692.30. If you multiply that by 26 pay periods you get $17,999.80. I could have changed my deduction for the final pay period to contribute the additional .20, but I didn't think it was worth the effort. That extra 20 cents a year won't accelerate my financial independence by more than a few seconds. :D

CppCoder
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Re: Who missed out on maximizing 401k?

Post by CppCoder » Wed Dec 20, 2017 9:15 am

Even if your employer caps your contributions for you, if you changed jobs during the year, employer #2 won't know what employer #1 contributed, so the onus is still on the individual to cap himself/herself.

On a personal note, hit $18,000 in May...will hit $54,000 on the last paycheck. Mega Backdoor Roth FTW!

bradshaw1965
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Re: Who missed out on maximizing 401k?

Post by bradshaw1965 » Wed Dec 20, 2017 9:19 am

I was resigned to coming up short on catch up contributions due to general incompetence at the payroll service company but was happy to have my year end bonus dinged substantially since the snafus were sorted just in time.

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Earl Lemongrab
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Re: Who missed out on maximizing 401k?

Post by Earl Lemongrab » Wed Dec 20, 2017 12:04 pm

It's pretty easy at Megacorp. The plan allows after-tax, switches to after-tax when the deferral limit is reached, and has a limit of 30% of salary on contributions. So I put it at 30%, then get all the deferrals and as much Mega Backdoor as can be squeezed out by year's end.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.

new2bogle
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Re: Who missed out on maximizing 401k?

Post by new2bogle » Wed Dec 20, 2017 12:27 pm

I'll have my 401k maxed out after my last paycheck of the year (this week!)

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BogleFanGal
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Re: Who missed out on maximizing 401k?

Post by BogleFanGal » Thu Dec 21, 2017 8:24 am

TropikThunder wrote:
Wed Dec 20, 2017 1:00 am
BogleFanGal wrote:
Tue Dec 19, 2017 8:02 pm
Wow - this thread hit a nerve. LOL. I totally messed up the math this year :oops: - or should I say my spouse's HR dept messed it up. Handed us a 2017 pay period calendar and told us to max 2017 by dividing contributions among all pay periods equally.

Found out too late they were wrong. Last pay period counts as 2018, not 2017. (I was asking about this in another thread) We missed 18k which also cost us the full 6k catchup deduction, since that requires maxing 18k first. Painful.
How do you not have a paycheck still left in 2017? Is it a 1st-and-15th pay period cycle?
We do - but we missed their deadline for contribution changes - you have to make them like 2 pay periods in advance and they won't budge - even though the mistake was their fault. Very frustrating. Trying to let it go at this point, as there doesn't seem to be much I can do.

MrNewEngland
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Re: Who missed out on maximizing 401k?

Post by MrNewEngland » Thu Dec 21, 2017 8:52 am

I never max out my 401k and I don’t see a scenario anytime soon where I will. I’m a government employee so I have a lot of tax advantaged options and I use them all. I have a mandatory pension fund that I find with 6% of my salary, I always max out my Roth IRA, and HSA, a 401k and a 457k.

The pension fund, HSA, and Roth IRA all get maxed out and then I contribute what I can equally to the 401k and 457. Both have very good options in them.

To max out all my tax advantaged accounts I would have to contribute over $45,000 of my funds to do it. And since I contribute to Roth in my IRA, 401, and 457 I just can’t make that happen.

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rosylenm
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Re: Who missed out on maximizing 401k?

Post by rosylenm » Thu Dec 21, 2017 9:12 am

MrNewEngland wrote:
Thu Dec 21, 2017 8:52 am
I never max out my 401k and I don’t see a scenario anytime soon where I will. I’m a government employee so I have a lot of tax advantaged options and I use them all. I have a mandatory pension fund that I find with 6% of my salary, I always max out my Roth IRA, and HSA, a 401k and a 457k.

The pension fund, HSA, and Roth IRA all get maxed out and then I contribute what I can equally to the 401k and 457. Both have very good options in them.

To max out all my tax advantaged accounts I would have to contribute over $45,000 of my funds to do it. And since I contribute to Roth in my IRA, 401, and 457 I just can’t make that happen.
I wish I had that problem.

MrNewEngland
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Re: Who missed out on maximizing 401k?

Post by MrNewEngland » Thu Dec 21, 2017 9:40 am

rosylenm wrote:
Thu Dec 21, 2017 9:12 am
MrNewEngland wrote:
Thu Dec 21, 2017 8:52 am
I never max out my 401k and I don’t see a scenario anytime soon where I will. I’m a government employee so I have a lot of tax advantaged options and I use them all. I have a mandatory pension fund that I find with 6% of my salary, I always max out my Roth IRA, and HSA, a 401k and a 457k.

The pension fund, HSA, and Roth IRA all get maxed out and then I contribute what I can equally to the 401k and 457. Both have very good options in them.

To max out all my tax advantaged accounts I would have to contribute over $45,000 of my funds to do it. And since I contribute to Roth in my IRA, 401, and 457 I just can’t make that happen.
I wish I had that problem.
It's certainly a good problem to have and I didn't mean to sound as though I was complaining... unfortunately I don't make enough to max everything out. If I switched to traditional contributions instead of Roth to my IRA, 401K, and 457 I might come close but I see that as an actual net gain of zero.

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F150HD
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Re: Who missed out on maximizing 401k?

Post by F150HD » Thu Dec 21, 2017 11:52 am

The way to avoid this going forward is to use a percentage that may amount to be slightly above $18K. The employer system will automatically cut off at the maximum permitted by law.
+1

This was discussed in some detail here: new 401(k) limits announced

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oldzey
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Re: Who missed out on maximizing 401k?

Post by oldzey » Thu Dec 21, 2017 12:09 pm

Turned 50 last month; 2017 was my first year with catchup contributions permitted in my tax-deferred/advantaged accounts.

Used the opportunity to maximize my accounts: socked away $24,000 in my 403b and $6,500 in my Roth IRA.

Cheers!

:beer
"The broker said the stock was 'poised to move.' Silly me, I thought he meant up." ― Randy Thurman

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Johnnie
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Re: Who missed out on maximizing 401k?

Post by Johnnie » Thu Dec 21, 2017 10:31 pm

For a good long time now, once a year this is me to our person-in-charge-of-that: "Max me baby!" :D
"I know nothing."

that_guy
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Re: Who missed out on maximizing 401k?

Post by that_guy » Thu Dec 21, 2017 10:54 pm

I messed up and missed out on some of the government matching on my TSP. The last few years I have front loaded my TSP by putting in as much as I can early in the year so that it has more time to compound. This year I miss calculated and maxed out my contributions in pay period 25. So I didn't get the full match for pay period 26. However, and thankfully, by putting nearly $12500 in to my account by end of March I am pretty sure it still worked out in my favor with the good fortune of the stock market in 2017.

CoAndy
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Re: Who missed out on maximizing 401k?

Post by CoAndy » Fri Dec 22, 2017 10:44 am

Only managed $12,410.74 with a company match of $2,154.65. Though in January company did a vacation time buy back and deposited $10,700 in my 401(k). Total for the year: $25,265.39. Only wish I could do that every year....

Daryl
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Re: Who missed out on maximizing 401k?

Post by Daryl » Fri Dec 22, 2017 11:20 am

Never an issue!

I'll hit the max in Q2/Q3 most years. Mega-corp has a true-up of the company match, paid the following year. The combination of that true-up and front loading my contributions means that my 401K balance is pretty stagnant throughout the second half of the year!

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Re: Who missed out on maximizing 401k?

Post by brokendirtdart » Fri Dec 22, 2017 11:41 am

TSP without matching here. End of month December LESs are finally available on DFAS. Came in $8.69 short on the year, so I'm happy enough. :happy

This was my first year of trying to max it out. Instead of just picking a percentage and going with it, I bounced around and had a month at %50 and the last two months at %40. Having to move in September made me a bit conservative with payroll deduction as well.

I'm just grabbing a percentage in 18 and riding it until I max it early.

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