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(Reposted from "Retirement Discussions / Retirement" since I realized that board has almost nobody watching it. This whole forum is oddly structured with too many boards duplicating essentially the same topics, but it looks like this one gets a bit more traffic, so...)


If I retire at the end of December 2021, my last regular paycheck would come in January of 2022 (covering work in the last half of December), and then my year-end bonus (for the whole of 2021) would come in early March of 2022.

How are these last two paychecks handled when it comes to a 401K? Do I still get to make my regular contributions from them?

Would the answer be different if I were retiring earlier in the year, so that several more months passed between retirement and the (pro-rated) year-end bonus (which would still be in early March of the following year)?
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The numbers will be the same unless you bump into one of the maxes.

Highly compensated employees often have contribution limits on their 401ks. If that applies to you, it probably won't limit your contributions in your part year. So they can be larger than usual.
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LB9, It really depends on how your company and the 401K are setup.
In most companies, you would get the match as long as you were on payroll through the end of the year. With some others you could loose the match if you aren’t there to end of year.

As far as last paycheck goes as long as they send deductions to the 401K. Check with payroll as to when the 401K contributions will stop.

Best of luck.
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How are these last two paychecks handled when it comes to a 401K? Do I still get to make my regular contributions from them?

A 401(k) and Qualified Profit Sharing plan may have a 'last day' rule, requiring you to be employed on the last day of the plan year (note: this is usually, but not always, the calendar year) to participate in the plan...meaning making salary deferral contribution and receiving am employer match if one is normally made. Note that, generally, a Safe Harbor 401(k) may not use the 'last day' rule.

The paying of a bonus and when it is paid should have nothing to do with this, although it will have to do with the year you must declare the income for tax purposes.

Check with the plan administrator on remaining an 'eligible' employee vs. being considered an 'excludable' employee based on your last working day.

BruceM
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