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if you max the 401k, how do they determine how much is taken out of your paycheck each pay period.
Let's say you make 100k. max contribution is 17.5k or 17.5% of your salary in your case.
they take out 17.5% out of the gross salary each pay period, then tax you (fed/state/ss/etc.) on the remaining amount, and that becomes your take home pay for the period.
Let's say you make 100k. max contribution is 17.5k or 17.5% of your salary in your case.
they take out 17.5% out of the gross salary each pay period, then tax you (fed/state/ss/etc.) on the remaining amount, and that becomes your take home pay for the period.
im still confused. with my job, 17.5 percent of my salary is less than 17.5k, which means if i want to put in the max 17.5 percent, it won't be 17,500.
i want to put in the max 17,500, which is greater then 17.5 percent of my salary, so how would that work in terms of my biweekly check.
im still confused. with my job, 17.5 percent of my salary is less than 17.5k, which means if i want to put in the max 17.5 percent, it won't be 17,500.
i want to put in the max 17,500, which is greater then 17.5 percent of my salary, so how would that work in terms of my biweekly check.
ok, i'll give you another example:
let's say you make 50k a year.
max contribution is still 17.5k
that translates to 35% of your salary. (17500/50000)
each pay period (biweekly), you have 1923 gross (50k/26 biweekly checks)
out of that 1923, take out 35% (ie. 673 into your 401k)
the rest (1250) is taxes and you get the amount after taxes on the 1250.
In the previous scenario. If I make 100k maxing out at 17.5% but my employer matches 6% ($6000) is my max I can put in my 401 $23,500?
Yes. that's the max you could have in there given your employer's match of 6%.
but to clarify, 17.5% is just because your salary is at 100k in our hypothetical scenario. As i mentioned above, that percentage depends on your salary and the contribution limit which changes (or sometimes doesn't) annually.
Weirdly enough, My employer (county govt) puts in 5% whether I participate or not. There is no match. I've never heard of such a thing. This is on top of what I am required to put into my separate pension plan which is 6%. Right now I'm part time so my annual income is projected to be less than $20k...
In past years when I did not have a 401k I maxed my IRA contributions in addition to my pension.
I didn't even know about the 17.5% max. That would be an awesome goal to strive for, and yes, I think I could do it.
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