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rriceonice t1_j2biyth wrote

Reply to comment by muddgirl in 401(K) contribution question to make sure I don’t go over the limit by [deleted]

401k is not limited by company match. If you put in the max, whatever your companies give you is free cheese over the max. Plans like 457b have a employer/employee combined max contribution. 401k does not.

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muddgirl t1_j2c13u8 wrote

I think you missed the thrust of my question regarding company true-ups.

Let's say your company will match dollar for dollar up to 3% of your salary. You contribute 6% of your salary every paycheck, but you max out your 401k by the end of June and dont contribute the second half of the year.

If you work for a company that does not True Up, they will match the 3% for the paychecks that you contribute, that's it. So by maxing contribution early you miss out on the full company match. This is an extreme example but with Fidelity's percentage method of contribution, it's easy to miss the match for the last paycheck.

But if your company will true up the match at the end of the year, it doesn't matter if you miss contribution weeks as long as you work there for the whole year and your contribution percentage is high enough. For my example, since you contributed 6% for half the year that is equivalent to 3% for the whole year, and the company will make up the missing match.

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rriceonice t1_j2c1ncm wrote

I see now. Either way you can't go to post tax 401k after you max out your pre tax 401k. The plan is maxed at the annual cap up to $23,500 for FY23

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muddgirl t1_j2c22d8 wrote

If your plan allows it, you can contribute to an after-tax 401k above the limit for traditional and Roth, up to the total of $66,000 for all employee+employer contributions in 2023. To be clear, an after-tax 401k is different from a Roth.

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rriceonice t1_j2ckiuw wrote

Yes I know. I use both in my household.

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muddgirl t1_j2cnzbt wrote

So then you know that you CAN use an after-tax 401k after maxing out your Roth 401k/traditional 401k space, if offered by your plan.

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