Texas Proud
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- May 16, 2005
- Messages
- 17,266
I didn't list the terms of the match clearly:
The 401k match is 50% of the employee contribution up to the first 6% of that contribution. That is why I referred to it as a 3% match (yes, poor wording...). You are right, it is not a 3% contribution, it is a 50% match of the 1st 6%.
Example:
Salary totals $50K. They contribute (what I called a match) up to 3% (50% of 6%). With a biweekly gross of $1923, as long as I contribute >=$115 (6% of $50K/26 pay periods), they will add ~$58 ($1500 annually). A larger contribution doesn't get me more.
If I defer 1/2 ($25K deferred) then my biweekly gross would go to $962. Again, they match 50% of the first 6% I put in. Their match is now ~$29. I could still contribute more of each check to the max. The biweekly match would still be ~$29 ($750 annually). Same story on contributing more.
Maxing the contribution does max the match, but the difference in the reported salary changes the total match.
Feel free to correct my math if I am missing something.
I would say call HR and ask...
On the plans that I used to be in, if you had a 50% match up to 6%.... it was what you put in that paycheck... it was not what your yearly earnings were, but the earnings of that one paycheck...
So, if you get a $25K bonus on your last paycheck, you have a max match of $750 (3%)....
If you company looks at total compensation to match.... ask if that is W-2 wages or actually earnings including deferrals.... as I said, I know my mega treated the deferral as 'pay' for benefits.... you have to remember... these deferrals are set up for the top people and they are not going to put something in place that will hurt them if at all possible...