Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
2015 ended at about -2% overall.
I was planning on increasing 401k contributions to 80% for the first couple of paychecks, to get the majority of the 18k max in there asap, and then adjust down to the match level for the rest of the year, so that i wouldn't miss out on the full match.
any thoughts? Has anyone done this?
Funny you should mention this...this year I will be doing the exact same thing: funding most of this year's 401K, including catch-ups, within the first 3 months. Because my company is layoff-happy I want to ensure I get as much 401K investing as I possibly can, up to the max, just in case my job goes away. And if I'm still working next year, I'll do the same. Lather, rinse, repeat each year thereafter. And of course I have to keep 6% going each month to get the company's full match. I have a spreadsheet that helps me calculate exact percentages each month.
If your company matches per pay period you may not be getting the full company match.
I did that once by contributing over 75% when I started a job late in the years and yes, my match wasn't as much as if I had been contributing all year. If I could have maxed out an IRA I would have done so and contributed 90-95% - even 100%.
That's why I was so pissy about you picking on the idea that one might want to even contribute 100% of their income. People can easily get in situations where they can ramp up their contributions temporarily. I don't see the point of front-end loading it - like the OP wants - unless you are leaving employment and don't expect to be able to contribute late in the year.
Someone posts some sort of get-rich quick question at least once a week, but most people who don't inherit money only get rich by living beneath their means and saving aggressively. Making a large salary and having a great career has between diddly and squat do to with having a decent retirement.
I did a spreadsheet that starts with the minimum 6% 401K contribution each and every month. That's required every month to get my company's full matching amount. Then, I have another column where I put in the % over and above the initial 6% to contribute and that's where I play with the % contributions. The maximum total % allowed in any one month based on my plan's rules is 90%.
I figure out the total %s I need to mostly fund my 401K within 'x' number of months to reach the maximum amount for the year. Month 1 maybe 80%, Month 2 could be 60%, Month 3 perhaps 30% and after that the % drops down to the minimum 6% a month for each month the rest of the year. Then, if a layoff should affect me, I'd need to add up the remaining months of 6% and quickly change my contribution % to at least be able to contribute the maximum I can by the time of the final paycheck. In my company they usually give 1 month's notice.
Paranoid? Perhaps, but then again the company I joined last year happens to do a lot of layoffs. Better to be prepared. Funny thing is my manager thinks this is smart and now she wants to do the same thing so I sent her a spreadsheet template.
I'm a real advocate for fully funding one's 401K and when I get the chance I let younger working adults know their future selves in 20 to 30+ years will come back and thank their current self for being so wise.
I did that once by contributing over 75% when I started a job late in the years and yes, my match wasn't as much as if I had been contributing all year. If I could have maxed out an IRA I would have done so and contributed 90-95% - even 100%.
That's why I was so pissy about you picking on the idea that one might want to even contribute 100% of their income. People can easily get in situations where they can ramp up their contributions temporarily. I don't see the point of front-end loading it - like the OP wants - unless you are leaving employment and don't expect to be able to contribute late in the year.
Someone posts some sort of get-rich quick question at least once a week, but most people who don't inherit money only get rich by living beneath their means and saving aggressively. Making a large salary and having a great career has between diddly and squat do to with having a decent retirement.
If one is especially worried about timing and doesn't want to put all the withheld monies into their equity fund choices all at one time, one could choose to have some or most of those monies put into the money market option or whatever short term vehicle is available in their 401K plan and then do an exchange to move monies out of that current short term vehicle and into the equity funds they chose, whenever one wants. My company uses Fidelity and one can make changes often and without penalty.
For me the primary goal is making sure I can get the maximum 401K contribution for the year, in case of job loss. One can still "DCA" their way into equities within a 401K plan if wanted, using the method above. Again, for some that might make sense and for others, not so much. YMMV.
For the past few years, I've always contributed $2300/month. Payroll automatically stop deduction once I hit the max each year. I always enjoy the bigger paycheck near the end of the year and consider it bonus. I have no company matching so none of that comes into play.
Is there a benefit? I guess it depends on the year.
For the past few years, I've always contributed $2300/month. Payroll automatically stop deduction once I hit the max each year. I always enjoy the bigger paycheck near the end of the year and consider it bonus. I have no company matching so none of that comes into play.
Is there a benefit? I guess it depends on the year.
True.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
