No. of Recommendations: 0
If you hit the limit half way through the year, and that stops the deductions, the match for the year comes to only 2% rather than 4%.

Obviously this scenario needs to be reviewed with the employer to understand their plan's actual rules.

In this case, my company (Motorola) did what they called a "true-up" at the end of the year. They figured out what the company match would have been if your comtribution had not been cut off by hitting the max, and put in that amount all at once. IIRC in late January.

I understand many companies do this.

I didn't like it because it's just too danged hard to verify that they did it right, plus they can always change their mind and skip the true-up, plus their money goes in late in time so you miss out on the growth of it. The one time I let this happen, I did check the true-up and it was accurate.

After that, I just planned it so that I put in the max early in the yesr, but cut it down to 3% (the maximum company match amount) about mid-year, so that I'd hit the max on my last paycheck of the year.
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.