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|Subject: Re: 401(k) Article||Date: 4/25/2001 3:19 PM|
|Author: rkmacdonald||Number: 29320 of 77568|
Author: C2Reed Date: 4/25/01 11:11 AM Number: 29296
There is a 401(k)gotcha! ...In a nutshell, it works like this: If a highly compensated employee (e.g. $104,000 annually) chooses to contribute at a rate of 15% per pay period, they will reach the $10,500 legal limit after the 17th pay period out of 26, after which they will no longer contribute. Their match of dollar for dollar up to 3% of pay will amount to $2,160, and they will have missed out on the 3% match for the last 8 pay periods of the year.
My plan didn't do this. I am also a highly compensated employee, and after I reached the maximum contribution, the company continued making the matching payments through most of the rest of the year even though I was no longer making any payments.
Now, I'm in the process of retiring, so I won't have to worry about it any more.
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