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Subject:  Re: 401k problem Date:  12/3/2006  3:38 PM
Author:  pauleckler Number:  54601 of 88757

Suppose a common situation. You get qualified to participate in the 401K plan at your employer only on October 1 with no prior contributions for the year in a plan that allows a maximum contribution of 25%.

Could you make the full 25% contributions to the 401K plan pretax? As long as you do not exceed the $14K limit, I suspect yes. So that kind of catch-up is legal if your employer is willing to put up with the paperwork. (Presumably you reduce to a more normal contribution on Jan 1.)

I know of employers who require that you file paperwork every year for the then current years contribution (and make you figure your own pretax cutoff--stopping automatically if you exceed it). They probably do not care if you make catch up contributions in this way.

Others might find the added paperwork burdensome.
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