KrentistParticipantStatus: DentistPosts: 102Joined: 08/21/2018
My significant other (SO), a W2 employee, has a 4% employer match for the 401k contributions. The employer will only contribute 11k/year. SO has contributed the 19k permissible for 2019 but the employer match has only totaled 9.5k (due to SO contributing more/faster than the match was). So SO is now in a position with 1.5k match still on the table that is inaccessible since SO won’t be contributing any more employee funds to the 401k.
Do we chalk this up to a stupid tax of contributing too much/too fast for the employer match to be utilized or is there a way to access this 1.5k of employer match funds despite not having employee contributions remaining?
Thank you!August 24, 2019 at 8:04 am MST #241284ZaphodParticipantStatus: Physician, Small Business OwnerPosts: 6177Joined: 01/12/2016
Sometimes they have an end of year true up for these kinds of situations. For next year just ask how they do it and if there’s a true up. That way you can adjust your contributions to maximize it.PedsModeratorStatus: PhysicianPosts: 4405Joined: 01/08/2016
Read the plan documents. What are the matching conditions?
If it requires every paycheck then yes stupid tax.
if there’s a true up at the end of the year then max it out as fast as possible every yearAugust 24, 2019 at 8:19 am MST #241287ZZZParticipantStatus: SpousePosts: 697Joined: 06/18/2018
Gotta know the rules of the game. Read the plan docs and figure out how the match is applied. If it’s indeed per paycheck with no true up at the end of the year as you suggest, lesson learned.
“Do we chalk this up to a stupid tax?” Yes.August 24, 2019 at 8:36 am MST #241297