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Hit my 401k max today!
Old 11-05-2010, 12:07 PM   #1
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Hit my 401k max today!

Woo hoo. So both my 401k and ROTH are done for the year.
With my paycheck today I hit my max 401k contributions for the year. This includes my regular contribution and the additional money I can put away since I am now 50. Other then my wife, it seems this board is the only place I can brag and celebrate about it!

I learned long ago to not discuss money issues, especially saving, with friends and family. But then it leaves me sort of silently bragging to myself. But I know in this economy most of my friends stopped are reduced their 401k contributions and would be resentful if I told them I hit it early.

But I am an Architect. Last year I didn't work about half the year so I didn't come close to my 401k max. So this year when I started work again I upped my 401k contributions as high as I could (and still live comfortably) so that if I ended up getting reduced hours part way through the year I would get as much in my 401k as I could. Luckily I have been pretty steady all year and now I get my last three paychecks for the year will be full paychecks--just in time for Christmas! Woo-hoo!

Does anyone else here have no one else to talk to about money issues? For me, that alone makes this board a welcome relief, as I find it a bit frustrating that I have no one (other then my wife) that I can talk money issues with.
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Old 11-05-2010, 12:28 PM   #2
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Originally Posted by hakuna matata View Post
Does anyone else here have no one else to talk to about money issues? For me, that alone makes this board a welcome relief, as I find it a bit frustrating that I have no one (other then my wife) that I can talk money issues with.
x2!
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Old 11-05-2010, 12:30 PM   #3
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Brag on! Ha.

My wife and I are almost done with our contributions for the year also. I love the guilt-free, full paychecks in late November and December.

As a child, we never spoke about money in our family. Nowadays, I talk a lot about money with family and even some friends.
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Old 11-05-2010, 12:37 PM   #4
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Congrats on maxing out your 401k for the year.

I understand not being able to talk about this with most friends and coworkers. Just come here to talk about it and you will be understood and celebrated.
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Old 11-05-2010, 12:48 PM   #5
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One problem with maxing out a 401K early for some people is that they would lose any company matching for the remainder of the year.
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Old 11-05-2010, 12:49 PM   #6
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thanks everyone! It is odd to not be able to tell anyone in my everyday life about it. But doesn't it seem odd that you can't celebrate that sort of thing? Now I know what it must feel like to be the brainy kid who can't tell anyone they got a 100% on the test or they will get beat up.

Odd thing is that my friends are all smart people but they just aren't that frugal and don't make saving and retirement a priority like my wife and I do. Funny thing is that I don't feel we live an inferior life to their lifestyle, we just pay ourselves first.
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Old 11-05-2010, 12:50 PM   #7
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Good job. When I was earning a living and not living the good life. It was a challenge for me to get the max every year. Since half my paycheck was commission. I would have good months and bad months. So I usually put in the max from the get go. trouble is I was big on average cost investing and hated maxing out before the end of the year. I usually was able to jiggle my contributions around half way through the year and that helped.

Now my wife with a steady paycheck could figure what percentage to use to drag deductions through the whole year. But about every other year she would get the old give back, as a highly compensated employee.
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Old 11-05-2010, 12:51 PM   #8
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One problem with maxing out a 401K early for some people is that they would lose any company matching for the remainder of the year.
Well our company suspended the 401k match last year. Hopefully we get it back this next year. I don't believe ours is tied to anything but matching a percentage, so it doesn't matter if you max out early. But I do know of some companies that match by month which I assume is what causes a person to lose the matching funds.
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Old 11-05-2010, 12:52 PM   #9
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Congrats

I had never thought about losing the company match by finishing early. Not a concern for me as I can't get to the max on my current salary, but definitely something to keep in mind.
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Old 11-05-2010, 01:24 PM   #10
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One problem with maxing out a 401K early for some people is that they would lose any company matching for the remainder of the year.
Thankfully not an issue at my company, which continues the match after I hit the federal limit.

I've had my 401k contribution set at 40% since my company upped their limit. So I always hit the federal max. While dollar-cost-averaging might suggest a more even contribution plan, compound interest suggests investing it ASAP. Also, someday I expect to part ways with my current company. It may be a little nicer if that happens after I max out my contributions for the year.
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Old 11-05-2010, 01:27 PM   #11
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With my old company, they would give you 4% toward your 401k whether you contributed anything or not. So, I could plug away at the 401k, max it out early, and still get the company's 4% through the rest of the year. I liked that deal, because it felt like I was getting a raise just in time for Christmas. However, once the first paycheck came in the new year, I'd get knocked back down.

With my current employer, they'll contribute up to 4%, but it's a match. So, I have to adjust my 401k contribution throughout the year, to make sure I hit the federal limit on the final paycheck.

Congratulations on maxing your 401k and IRA out! I imagine not too many people are doing that these days.
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Old 11-05-2010, 01:30 PM   #12
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One problem with maxing out a 401K early for some people is that they would lose any company matching for the remainder of the year.
True -- it depends on the plan. My employer used to match dollar per dollar up to a flat $5000 per year, and after the end of the year they paid the entire match in one lump sum. In such a plan it doesn't matter when you make the contributions.

But now they've changed to a straight dollar for dollar up to the first 5% of each paycheck. So now, maxing out early also means losing some of the match so it's more important to monitor it and knock your contribution rate down a bit (but never below 5%) to capture all the match but come close to the limit. Ideally you'd max out on the last paycheck of the year.
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Old 11-05-2010, 01:32 PM   #13
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This year, DW's 401K will be maxed out with her last paycheck of the year.

I can't talk about money with anyone but my wife and people on this board. And even then, I still have to be careful...
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Old 11-05-2010, 01:38 PM   #14
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One problem with maxing out a 401K early for some people is that they would lose any company matching for the remainder of the year.
Check with your 401K Administrator - some plans feature a True-Up Contribution feature where you'll get the full company match even if you complete your contributions early. The True-Up feature is slightly confusing to me - check this blog post for more info Strategies For Maxing Out Your 401k/403b and Company Match, True-Up Contributions My Money Blog
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Old 11-05-2010, 01:52 PM   #15
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Hooray!

I'm looking forward to January so I can make another contribution to my ROTH. I used to fund it with monthly deposits but now I just make a lump-sum at the start of the year
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Old 11-05-2010, 01:59 PM   #16
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And even then, I still have to be careful...
You betcha!

We poor, old, retired folks on this board no longer have a 401(k), nor earned income to contribute to an IRA.

Retirement requires a lot of sacrifices ...
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Old 11-05-2010, 02:03 PM   #17
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Well our company suspended the 401k match last year. Hopefully we get it back this next year. I don't believe ours is tied to anything but matching a percentage, so it doesn't matter if you max out early. But I do know of some companies that match by month which I assume is what causes a person to lose the matching funds.

Be careful.... you might not be reading it correctly...

Our company matches 1/2 of your contribution up to a total of 3% (so 6% in gets you the 3% match).... but it is calculated PER PAYCHECK....

Now, we are a bit different in that you can contribute up to 90% of your paycheck... so if you wanted, you could fill up your account in a few months (according to how much you make)... but the match is based on the 6% max...

Lets say you make $120K and put 90% or $9K in the first month... your match is $300... there is no 'make up' provision for your match... so in a few months you can not contribute any more and you got a total of $900 match... vs $3,000 if you spread it out over the year....
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Old 11-05-2010, 02:08 PM   #18
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Congratulations on reaching your max

I always deposited as much as I could to my 401k to max it out asap - I wasn't prepared to weigh the pros and cons of DCA'ing or putting it in asap - I just liked getting in there as quickly as possible.

It is good to be able to come here and brag about such stuff. I would talk in general terms on personal finance with colleagues at work but never in detail. As for family, they live on different continents. (401 what)
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Old 11-05-2010, 06:21 PM   #19
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Congratulations Hakuna. To answer your question I am in your situation also - I have no one else to talk to about money issues or early retirement. My peers would not understand me. There is no way I can discuss money with patients. I live on my own. Been thinking of joining other websites also (i.e. Bogleheads) but in my opinion this ER site is the best one.

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Originally Posted by hakuna matata View Post
Does anyone else here have no one else to talk to about money issues? For me, that alone makes this board a welcome relief, as I find it a bit frustrating that I have no one (other then my wife) that I can talk money issues with.
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Old 11-09-2010, 06:21 PM   #20
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But I am an Architect. Last year I didn't work about half the year so I didn't come close to my 401k max.
I remember your occupation from your introductory post. Honestly! Showing off my memory again.

I just searched the Web to learn that architects were among people who got hurt bad in this Great Recession. So, it seems like the economy has stabilized somewhat. Cheers!

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Been thinking of joining other websites also (i.e. Bogleheads) but in my opinion this ER site is the best one.
No offense meant to anyone including Mr. Bogle, but having seen Mr. Bogle in TV interviews, I can imagine what the Bogleheads site and his disciplines are like. On the other hand, this site to me is more like Uncle Warren. Buffet's irreverent style and his jokes and metaphors often send interviewing reporters, oh those cute woman reporters, away giggling. When I grow up, I want to be funny like Warren.
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