1 yr ban of 401K contribution?

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birdy
Posts: 358
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Re: 1 yr ban of 401K contribution?

Post by birdy » Fri Jan 10, 2020 1:26 pm

To get through the one year, max your ROTH contribution! Put your money in a savings account Don't spend it. You can always save in a CD ladder or other post-tax (non-401K) index fund.

birdy

nolesrule
Posts: 1622
Joined: Thu Feb 26, 2015 10:59 am

Re: 1 yr ban of 401K contribution?

Post by nolesrule » Fri Jan 10, 2020 2:53 pm

wrongfunds wrote:
Fri Jan 10, 2020 1:15 pm
That would be ugly to have it clawed back out of your account in you're laid off.
It is done routinely
Yup, I was laid off after 4 years from a company with a 5 year vesting schedule. I only get to keep 80% of the money attributed to the employer match.

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JamesSFO
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Re: 1 yr ban of 401K contribution?

Post by JamesSFO » Fri Feb 14, 2020 1:48 pm

KyleAAA wrote:
Fri Jan 10, 2020 12:19 pm
UALflyer wrote:
Fri Jan 10, 2020 8:03 am

You keep approaching this problem from the perspective of a responsible saver who has the means and wants to save towards his retirement. That's great, and this is exactly what this forum is all about. The problem, however, is that for a number of reasons the vast majority of the populat[ion]
I am not approaching the problem from that perspective. I am approaching the problem from the perspective of the business owner.
:confused

Just coming back this thread and have to agree with UALflyer, you just keep shooting down things that legitimate business owners pick. Do I like that we landed on our plan having a 1-year period? No. Is it the best choice for us a business given the other options to achive our ends: yes (from talking to multiple plan design consultants).

H-Town
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Re: 1 yr ban of 401K contribution?

Post by H-Town » Fri Feb 14, 2020 1:58 pm

Momus wrote:
Thu Jan 09, 2020 12:41 pm
Front load your 401k before you quit, you can put as much as 80% of your gross paycheck.

Depends on how much you make, If you are making like 200k, in just 2 paycheck you can max it out. Then, quit.

Or, just put as much as you can, and rely on your emergency savings (hope you have at least 6-8 months).
^ this.

OP: You have plenty of time from now until summer to max out 401k contribution.

Do you know how much your next job will allow you to do the max 401k contribution?

KyleAAA
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Contact:

Re: 1 yr ban of 401K contribution?

Post by KyleAAA » Fri Feb 14, 2020 3:26 pm

JamesSFO wrote:
Fri Feb 14, 2020 1:48 pm
KyleAAA wrote:
Fri Jan 10, 2020 12:19 pm
UALflyer wrote:
Fri Jan 10, 2020 8:03 am

You keep approaching this problem from the perspective of a responsible saver who has the means and wants to save towards his retirement. That's great, and this is exactly what this forum is all about. The problem, however, is that for a number of reasons the vast majority of the populat[ion]
I am not approaching the problem from that perspective. I am approaching the problem from the perspective of the business owner.
:confused

Just coming back this thread and have to agree with UALflyer, you just keep shooting down things that legitimate business owners pick. Do I like that we landed on our plan having a 1-year period? No. Is it the best choice for us a business given the other options to achive our ends: yes (from talking to multiple plan design consultants).
No, it isn't.

JBTX
Posts: 6311
Joined: Wed Jul 26, 2017 12:46 pm

Re: 1 yr ban of 401K contribution?

Post by JBTX » Fri Feb 14, 2020 3:46 pm

KyleAAA wrote:
Fri Feb 14, 2020 3:26 pm
JamesSFO wrote:
Fri Feb 14, 2020 1:48 pm
KyleAAA wrote:
Fri Jan 10, 2020 12:19 pm
UALflyer wrote:
Fri Jan 10, 2020 8:03 am

You keep approaching this problem from the perspective of a responsible saver who has the means and wants to save towards his retirement. That's great, and this is exactly what this forum is all about. The problem, however, is that for a number of reasons the vast majority of the populat[ion]
I am not approaching the problem from that perspective. I am approaching the problem from the perspective of the business owner.
:confused

Just coming back this thread and have to agree with UALflyer, you just keep shooting down things that legitimate business owners pick. Do I like that we landed on our plan having a 1-year period? No. Is it the best choice for us a business given the other options to achive our ends: yes (from talking to multiple plan design consultants).
No, it isn't.
Several who either run a business or were directly involved in implementing a plan have given you rational reasons why that was done. You choose not to accept them because it doesn't fit your disgruntled narrative. That's your choice - but don't say there aren't reasons - and don't tell people how to run their businesses.

I doubt you've ever put in a good deal of effort implementing a good plan with a generous match and then end up with 10-20% participation rates. People don't even take advantage of free one to one matches. Why you think a 401k plan is a show stopper for them shows you haven't dealt with those kinds of employees.

KyleAAA
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Contact:

Re: 1 yr ban of 401K contribution?

Post by KyleAAA » Fri Feb 14, 2020 4:05 pm

JBTX wrote:
Fri Feb 14, 2020 3:46 pm
KyleAAA wrote:
Fri Feb 14, 2020 3:26 pm
JamesSFO wrote:
Fri Feb 14, 2020 1:48 pm
KyleAAA wrote:
Fri Jan 10, 2020 12:19 pm
UALflyer wrote:
Fri Jan 10, 2020 8:03 am

You keep approaching this problem from the perspective of a responsible saver who has the means and wants to save towards his retirement. That's great, and this is exactly what this forum is all about. The problem, however, is that for a number of reasons the vast majority of the populat[ion]
I am not approaching the problem from that perspective. I am approaching the problem from the perspective of the business owner.
:confused

Just coming back this thread and have to agree with UALflyer, you just keep shooting down things that legitimate business owners pick. Do I like that we landed on our plan having a 1-year period? No. Is it the best choice for us a business given the other options to achive our ends: yes (from talking to multiple plan design consultants).
No, it isn't.
Several who either run a business or were directly involved in implementing a plan have given you rational reasons why that was done. You choose not to accept them because it doesn't fit your disgruntled narrative. That's your choice - but don't say there aren't reasons - and don't tell people how to run their businesses.

I doubt you've ever put in a good deal of effort implementing a good plan with a generous match and then end up with 10-20% participation rates. People don't even take advantage of free one to one matches. Why you think a 401k plan is a show stopper for them shows you haven't dealt with those kinds of employees.
The reasons are certainly rational, but that doesn't imply it is the best solution. I never claimed there weren't legitimate reasons to do things that way, just that it was a subpar solution to the problem they were trying to solve. They are free to implement poor solutions even though better solutions exist. Nobody said otherwise.

I certainly never said a 401k plan is a show stopper for anybody. In fact, I very directly said the opposite above.

JBTX
Posts: 6311
Joined: Wed Jul 26, 2017 12:46 pm

Re: 1 yr ban of 401K contribution?

Post by JBTX » Fri Feb 14, 2020 4:50 pm

KyleAAA wrote:
Fri Feb 14, 2020 4:05 pm
JBTX wrote:
Fri Feb 14, 2020 3:46 pm
KyleAAA wrote:
Fri Feb 14, 2020 3:26 pm
JamesSFO wrote:
Fri Feb 14, 2020 1:48 pm
KyleAAA wrote:
Fri Jan 10, 2020 12:19 pm


I am not approaching the problem from that perspective. I am approaching the problem from the perspective of the business owner.
:confused

Just coming back this thread and have to agree with UALflyer, you just keep shooting down things that legitimate business owners pick. Do I like that we landed on our plan having a 1-year period? No. Is it the best choice for us a business given the other options to achive our ends: yes (from talking to multiple plan design consultants).
No, it isn't.
Several who either run a business or were directly involved in implementing a plan have given you rational reasons why that was done. You choose not to accept them because it doesn't fit your disgruntled narrative. That's your choice - but don't say there aren't reasons - and don't tell people how to run their businesses.

I doubt you've ever put in a good deal of effort implementing a good plan with a generous match and then end up with 10-20% participation rates. People don't even take advantage of free one to one matches. Why you think a 401k plan is a show stopper for them shows you haven't dealt with those kinds of employees.
The reasons are certainly rational, but that doesn't imply it is the best solution. I never claimed there weren't legitimate reasons to do things that way, just that it was a subpar solution to the problem they were trying to solve. They are free to implement poor solutions even though better solutions exist. Nobody said otherwise.

I certainly never said a 401k plan is a show stopper for anybody. In fact, I very directly said the opposite above.
When you repeatedly tell people who have direct experience with these issues that their solutions are "subpar" (which is basically saying they don't know how to do their job) then this is the reaction you will get. Perhaps you are trolling and this is the reaction you want.

KyleAAA
Posts: 8316
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Re: 1 yr ban of 401K contribution?

Post by KyleAAA » Fri Feb 14, 2020 5:20 pm

JBTX wrote:
Fri Feb 14, 2020 4:50 pm
KyleAAA wrote:
Fri Feb 14, 2020 4:05 pm
JBTX wrote:
Fri Feb 14, 2020 3:46 pm
KyleAAA wrote:
Fri Feb 14, 2020 3:26 pm
JamesSFO wrote:
Fri Feb 14, 2020 1:48 pm


:confused

Just coming back this thread and have to agree with UALflyer, you just keep shooting down things that legitimate business owners pick. Do I like that we landed on our plan having a 1-year period? No. Is it the best choice for us a business given the other options to achive our ends: yes (from talking to multiple plan design consultants).
No, it isn't.
Several who either run a business or were directly involved in implementing a plan have given you rational reasons why that was done. You choose not to accept them because it doesn't fit your disgruntled narrative. That's your choice - but don't say there aren't reasons - and don't tell people how to run their businesses.

I doubt you've ever put in a good deal of effort implementing a good plan with a generous match and then end up with 10-20% participation rates. People don't even take advantage of free one to one matches. Why you think a 401k plan is a show stopper for them shows you haven't dealt with those kinds of employees.
The reasons are certainly rational, but that doesn't imply it is the best solution. I never claimed there weren't legitimate reasons to do things that way, just that it was a subpar solution to the problem they were trying to solve. They are free to implement poor solutions even though better solutions exist. Nobody said otherwise.

I certainly never said a 401k plan is a show stopper for anybody. In fact, I very directly said the opposite above.
When you repeatedly tell people who have direct experience with these issues that their solutions are "subpar" (which is basically saying they don't know how to do their job) then this is the reaction you will get. Perhaps you are trolling and this is the reaction you want.
It is not saying they don't know how to do their job.

JBTX
Posts: 6311
Joined: Wed Jul 26, 2017 12:46 pm

Re: 1 yr ban of 401K contribution?

Post by JBTX » Fri Feb 14, 2020 5:50 pm

KyleAAA wrote:
Fri Feb 14, 2020 5:20 pm
JBTX wrote:
Fri Feb 14, 2020 4:50 pm
KyleAAA wrote:
Fri Feb 14, 2020 4:05 pm
JBTX wrote:
Fri Feb 14, 2020 3:46 pm
KyleAAA wrote:
Fri Feb 14, 2020 3:26 pm


No, it isn't.
Several who either run a business or were directly involved in implementing a plan have given you rational reasons why that was done. You choose not to accept them because it doesn't fit your disgruntled narrative. That's your choice - but don't say there aren't reasons - and don't tell people how to run their businesses.

I doubt you've ever put in a good deal of effort implementing a good plan with a generous match and then end up with 10-20% participation rates. People don't even take advantage of free one to one matches. Why you think a 401k plan is a show stopper for them shows you haven't dealt with those kinds of employees.
The reasons are certainly rational, but that doesn't imply it is the best solution. I never claimed there weren't legitimate reasons to do things that way, just that it was a subpar solution to the problem they were trying to solve. They are free to implement poor solutions even though better solutions exist. Nobody said otherwise.

I certainly never said a 401k plan is a show stopper for anybody. In fact, I very directly said the opposite above.
When you repeatedly tell people who have direct experience with these issues that their solutions are "subpar" (which is basically saying they don't know how to do their job) then this is the reaction you will get. Perhaps you are trolling and this is the reaction you want.
It is not saying they don't know how to do their job.
Yes, it is.

KyleAAA
Posts: 8316
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Re: 1 yr ban of 401K contribution?

Post by KyleAAA » Fri Feb 14, 2020 5:56 pm

JBTX wrote:
Fri Feb 14, 2020 5:50 pm
KyleAAA wrote:
Fri Feb 14, 2020 5:20 pm
JBTX wrote:
Fri Feb 14, 2020 4:50 pm
KyleAAA wrote:
Fri Feb 14, 2020 4:05 pm
JBTX wrote:
Fri Feb 14, 2020 3:46 pm


Several who either run a business or were directly involved in implementing a plan have given you rational reasons why that was done. You choose not to accept them because it doesn't fit your disgruntled narrative. That's your choice - but don't say there aren't reasons - and don't tell people how to run their businesses.

I doubt you've ever put in a good deal of effort implementing a good plan with a generous match and then end up with 10-20% participation rates. People don't even take advantage of free one to one matches. Why you think a 401k plan is a show stopper for them shows you haven't dealt with those kinds of employees.
The reasons are certainly rational, but that doesn't imply it is the best solution. I never claimed there weren't legitimate reasons to do things that way, just that it was a subpar solution to the problem they were trying to solve. They are free to implement poor solutions even though better solutions exist. Nobody said otherwise.

I certainly never said a 401k plan is a show stopper for anybody. In fact, I very directly said the opposite above.
When you repeatedly tell people who have direct experience with these issues that their solutions are "subpar" (which is basically saying they don't know how to do their job) then this is the reaction you will get. Perhaps you are trolling and this is the reaction you want.
It is not saying they don't know how to do their job.
Yes, it is.
No.

JBTX
Posts: 6311
Joined: Wed Jul 26, 2017 12:46 pm

Re: 1 yr ban of 401K contribution?

Post by JBTX » Fri Feb 14, 2020 6:03 pm

KyleAAA wrote:
Fri Feb 14, 2020 5:56 pm
JBTX wrote:
Fri Feb 14, 2020 5:50 pm
KyleAAA wrote:
Fri Feb 14, 2020 5:20 pm
JBTX wrote:
Fri Feb 14, 2020 4:50 pm
KyleAAA wrote:
Fri Feb 14, 2020 4:05 pm


The reasons are certainly rational, but that doesn't imply it is the best solution. I never claimed there weren't legitimate reasons to do things that way, just that it was a subpar solution to the problem they were trying to solve. They are free to implement poor solutions even though better solutions exist. Nobody said otherwise.

I certainly never said a 401k plan is a show stopper for anybody. In fact, I very directly said the opposite above.
When you repeatedly tell people who have direct experience with these issues that their solutions are "subpar" (which is basically saying they don't know how to do their job) then this is the reaction you will get. Perhaps you are trolling and this is the reaction you want.
It is not saying they don't know how to do their job.
Yes, it is.
No.
https://youtu.be/ohDB5gbtaEQ

User avatar
JamesSFO
Posts: 3240
Joined: Thu Apr 26, 2012 10:16 pm

Re: 1 yr ban of 401K contribution?

Post by JamesSFO » Fri Feb 14, 2020 9:33 pm

KyleAAA wrote:
Fri Feb 14, 2020 4:05 pm
The reasons are certainly rational, but that doesn't imply it is the best solution. I never claimed there weren't legitimate reasons to do things that way, just that it was a subpar solution to the problem they were trying to solve. They are free to implement poor solutions even though better solutions exist. Nobody said otherwise.

I certainly never said a 401k plan is a show stopper for anybody. In fact, I very directly said the opposite above.
(emphasis added above and quoting shortened)

So the four different plan design companies I spoke with about options all lack some insight into a solution to the specific business needs we had (limit short time workers and trainees from the plan because we wanted to provide a generous 3% non-discretionary match to address HCE issues among other things but do not want to give it to short-timed workers as increasing their salary 3% would be undesirable)?

Auto-enroll/auto-escalate would not have fixed this.

What is your better-than-par solution?

pasadena
Posts: 478
Joined: Sat Jul 02, 2016 1:23 am
Location: Washington State

Re: 1 yr ban of 401K contribution?

Post by pasadena » Fri Feb 14, 2020 9:49 pm

Phinance wrote:
Thu Jan 09, 2020 12:33 pm
Scenario: I’m currently in a job where my total yearly (employee/employer) 401K contribution is 57K (4750/mo). Considering taking a job in another city this summer for family reasons. However this job restricts their 401K contribution to 1 yr after hire (I would be eligible to contribute July 2021). Is this devastating financially? Any ways of Lessing this financial hit? (Opening an individual 401K? Catch up contributions?)

Best & Thank you.
While it would certainly be a big red mark in the "minus" column for me, it not devastating. Start by front-loading your current 401(k) as much as you can. How high you can go per paycheck depends on your plan's rules, and your actual paycheck. You need to keep enough to pay for all taxes and deductions. Dig into your savings to make up for a very small paycheck for the next few months. You could also lower your taxes to the max during that period, if you need more room. You can rebuild your savings (and your taxes) during the second half of the year. Max-out your Roth IRA, and your HSA if you have one. Invest anything above that in your taxable account. The important thing is to save as much as you would have in your current job, just using different vehicules and paying taxes earlier. You may lose part of your company match.

That being said, this kind of policy would make me take another good hard look at all the other benefits and policies that I could get my hands on before signing. I doubt this new 401(k) will let you put in the full 57k.

It's also a pretty good opportunity to negotiate a sign-on bonus. Make an excel sheet with what this would cost you (lower employee contribution, lower employer match, higher taxes this year and next year, post-tax growth vs years of pre-tax growth, etc)

Saving$
Posts: 1931
Joined: Sat Nov 05, 2011 8:33 pm

Re: 1 yr ban of 401K contribution?

Post by Saving$ » Fri Feb 14, 2020 10:04 pm

Momus wrote:
Thu Jan 09, 2020 12:41 pm
Front load your 401k before you quit, you can put as much as 80% of your gross paycheck.

Depends on how much you make, If you are making like 200k, in just 2 paycheck you can max it out. Then, quit.

Or, just put as much as you can, and rely on your emergency savings (hope you have at least 6-8 months).
1. Front loading is a great idea. And you can back load on the other end starting next July.
2. Please elaborate on the 80%. Is there really a rule that limits you to 80% or is that the practical max because your employer still has to deduct SS, unemployment and health benefits from the check?

pasadena
Posts: 478
Joined: Sat Jul 02, 2016 1:23 am
Location: Washington State

Re: 1 yr ban of 401K contribution?

Post by pasadena » Fri Feb 14, 2020 10:09 pm

Saving$ wrote:
Fri Feb 14, 2020 10:04 pm
2. Please elaborate on the 80%. Is there really a rule that limits you to 80% or is that the practical max because your employer still has to deduct SS, unemployment and health benefits from the check?
I believe each plan has their own maximum. Mine is 65%. My previous one was 13% because I was HCE, 25% otherwise.

stoptothink
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Re: 1 yr ban of 401K contribution?

Post by stoptothink » Fri Feb 14, 2020 10:10 pm

UALflyer wrote:
Thu Jan 09, 2020 7:44 pm
123 wrote:
Thu Jan 09, 2020 5:03 pm
It used to be much more common to limit 401k participation to employees who had served at least a year. It was done to reduce costs to an employer so they didn't have to pay the costs of account maintenance, or fund matching contributions, for employees who didn't sit around. With the acknowledgement that virtually no one is an employee at the same employer for life these limitations are falling by the wayside, at least for many employers. If an employer still has such a limitation it's a sign that they're of the old "You have to pay your dues" mentality. It could be a clue that other parts of their HR policies are archaic as well.
It's actually not archaic at all and continues to be a fairly common feature found in quite a few 401(k)'s. The primary issue here has to do with the HCE discrimination testing.
Maybe I am out of the loop because I haven't really job searched in almost 5yrs, but in 24yrs of working and more than a dozen companies, I do not believe I have ever worked for a company that allowed employees to immediately contribute to the 401k plan. It is 6-months with my current employer. I thought it was just the norm. I have always taken this into consideration and front or back loaded.

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