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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75890  
Subject: Re: Maxing out the 401(k) Date: 6/25/2007 7:46 PM
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I've never seen a plan that allows a lump sum deposit, but there's no reason you cannot change your contribution limit at the end of the year to hit the max.

My strategy is opposite of what you're doing. I set up my contribution percentage so that I will max out in the 4th quarter sometime, and that's without counting bonuses. I will be 50 next year when I can do catch-up contributions, and I actually have my deductions this year set up to meet that particular amount so that I could get used to budgeting on that amount prior to next year. All that really means is that I will hit the max that much sooner in the year.

If you do plan on maxing out your contribution, then I think I'd opt for front-loading the contributions, provided that you do it in such a way as to max out the match. Some companies only match your contributions each quarter, so if you max out in June, you lose out on the 3rd and 4th quarter matches. Some companies, like the one for which I work, will do the maximum matching in each quarter even if you have reached your own maximum contribution earier in the year. I wasn't sure how they did it the first year, so I made sure that my contributions were spread over the entire year to get all the match.

Just another alternative for you to consider.
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