No. of Recommendations: 0
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.


Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.