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Old 09-20-2017, 12:01 AM
 
10,600 posts, read 12,062,327 times
Reputation: 16764

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I was all set to ask (and had already typed the question and everything) but then did some more Googling ....
...about how to tell a new employer NOT to put money away in my 401k because it would put me over my limit plus catch-up for the year.

When I found info online saying 401k limits don't include any employer matching or non-elective contributions.
I never knew that. Never got close enough to the limit to even think about it before.

Did you know that -- that the limits are only for YOUR part, the employee amount?

The info says if you, the worker, max out your $18,000 elective deferral in your primary 401(k), an employer could still contribute to another 401(k) plan for you. It says the total contribution limit including elective deferrals and employer contributions is more than $50,000 per 401(k) plan.

Who knew? Glad I found out though.
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Old 09-20-2017, 07:21 AM
 
1,294 posts, read 1,197,964 times
Reputation: 3416
Well, I would think it would be hard to include the employer's contribution.

For starters, most employer contributions are dependent upon company earnings. If the economy tanks or the company has some major capital expenditures, they may not contribute as much as the policy states. So you may think they are matching 50% of your contribution, say, but in the end they may only contribute half that....leaving you to miss out on savings opportunities.

Second, the limits set by the government are based on your income, whereas the contributions from the employer are based on your contribution. It wouldn't be impossible but it would be very difficult to calculate how much you could contribute if you had to factor in your employer's part also.

And of course, it would be a disincentive for both employers and employees....which is not what the government wants to do. They want you to save, while also ensuring that they collect some taxes.
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Old 09-20-2017, 07:24 AM
 
26,181 posts, read 21,481,737 times
Reputation: 22766
Actually it depends on what 401k bucket you are talking about, elective deferral 18k the employer doesn't figure into but over all contributions limits they do which is 54k for this year not 50k
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Old 09-20-2017, 07:26 AM
 
26,181 posts, read 21,481,737 times
Reputation: 22766
Quote:
Originally Posted by MarianRavenwood View Post
Well, I would think it would be hard to include the employer's contribution.

For starters, most employer contributions are dependent upon company earnings. If the economy tanks or the company has some major capital expenditures, they may not contribute as much as the policy states. So you may think they are matching 50% of your contribution, say, but in the end they may only contribute half that....leaving you to miss out on savings opportunities.

Second, the limits set by the government are based on your income, whereas the contributions from the employer are based on your contribution. It wouldn't be impossible but it would be very difficult to calculate how much you could contribute if you had to factor in your employer's part also.

And of course, it would be a disincentive for both employers and employees....which is not what the government wants to do. They want you to save, while also ensuring that they collect some taxes.
401k limits aren't based on income from an individual or employee perspective
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Old 09-20-2017, 07:42 AM
 
2,212 posts, read 1,070,658 times
Reputation: 1381
Quote:
Originally Posted by selhars View Post
I was all set to ask (and had already typed the question and everything) but then did some more Googling ....
...about how to tell a new employer NOT to put money away in my 401k because it would put me over my limit plus catch-up for the year.

When I found info online saying 401k limits don't include any employer matching or non-elective contributions.
I never knew that. Never got close enough to the limit to even think about it before.

Did you know that -- that the limits are only for YOUR part, the employee amount?

The info says if you, the worker, max out your $18,000 elective deferral in your primary 401(k), an employer could still contribute to another 401(k) plan for you. It says the total contribution limit including elective deferrals and employer contributions is more than $50,000 per 401(k) plan.

Who knew? Glad I found out though.
Yes, I knew that right from the start because that was one of the questions I asked when our company went to a 401K and we had financial sessions on it.
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Old 09-20-2017, 09:41 AM
 
Location: Lower East Side, NYC
2,970 posts, read 2,604,090 times
Reputation: 2371
My web portal for my 401k tells me this.
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Old 09-20-2017, 11:40 AM
 
10,600 posts, read 12,062,327 times
Reputation: 16764
Quote:
which is 54k for this year not 50k
I never said it was 50k.
I believe I said more than 50k to keep it round numbers.
But thank you.

I just never really gave it any thought. I saw the words "contribution limits" and thought (presumed apparently) that was the "total" allowed -- period. But, glad I know better now.
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Old 09-20-2017, 01:09 PM
 
3,050 posts, read 4,984,973 times
Reputation: 3780
And just to keep you ahead of the game, the numbers you need to know for 2018 are $18,500/$55,000.
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Old 09-23-2017, 12:04 AM
 
30,876 posts, read 36,854,288 times
Reputation: 34467
Quote:
Originally Posted by selhars View Post
I was all set to ask (and had already typed the question and everything) but then did some more Googling ....
...about how to tell a new employer NOT to put money away in my 401k because it would put me over my limit plus catch-up for the year.

When I found info online saying 401k limits don't include any employer matching or non-elective contributions.
I never knew that. Never got close enough to the limit to even think about it before.

Did you know that -- that the limits are only for YOUR part, the employee amount?

The info says if you, the worker, max out your $18,000 elective deferral in your primary 401(k), an employer could still contribute to another 401(k) plan for you. It says the total contribution limit including elective deferrals and employer contributions is more than $50,000 per 401(k) plan.

Who knew? Glad I found out though.
Yes, I knew all that.
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