Optimizing 401k contribution with variable income

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Optimizing 401k contribution with variable income

Post by notmyhand » Sun Nov 19, 2017 9:00 am

New job –
My employer matches 4% but only lets me change contribution amount twice a year. They also require you contribute each pay period to get the match. Billed salary should be right around 100k.

Normally I would just do 18.5k divided by 24 as we are paid semi-monthly which would be $770.83 a pay period. However, most of my pay is now commission based 4x a year and is variable. Based on my last few pay periods, my commissions will be at least $20k a quarter which means my $770.83 is less than 4% so I won't get the full match. However, it is probably my commissions will be ~60k a quarter so if I put something like 6% then I will likely finish early and will miss out on match. I can only change my contributions in January and July so can’t fix anything at the end.

I have asked the other five people in my position and they said they have never thought about it. HR is not sure as no one has asked about it (tiny company). Yes I have confirmed that the 401k match counts my bonus amount.

I cannot seem to figure out the best way to make sure I get all of my matching.

Regular semi-monthly pay: $4-$5k gross (Depends on billable hours)
Commission 4x a year – 20k-60k gross
Matching – dollar for dollar up to 4%

Any ideas?

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