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Re: Maxing out your 401k
Old 06-04-2006, 04:44 PM   #21
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Re: Maxing out your 401k

That's a pretty good #, I would have thought it was less.

Are you running classes at the Firm?

Work is something you do to get enough $ so you don't have to....Me.
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Re: Maxing out your 401k
Old 06-05-2006, 11:04 AM   #22
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Re: Maxing out your 401k

Originally Posted by Martha
When I was in management in our business of about 75 employees, we converted to a safe harbor 401k plan.* We do not provide a "match" but contribute through our 401k/profit sharing plan a minimum of 3% of an employee's wages and going up to a high of 14.5% depending on age and length of service for non-lawyer employees.* This enables us to put up to 14.5% pretax in the shareholder's pockets so most shareholder's can max out the plan.* Which, if you are 50 and over, is $49,000 for 2006 and $44,000 if you are less than 50.

We don't pay the contribution until year end because it is a profit sharing contribution and we could decide to forgo or reduce the contributions.* We never have made less than the maximum.* The money doesn't actually hit employee accounts until early February because of the plan testing we have to do.

We also have the safe harbor plan, but we make the 3% minimum profit sharing contribution to the employees each month rather than waiting until the end of the year.

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Re: Maxing out your 401k
Old 06-05-2006, 11:12 AM   #23
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Re: Maxing out your 401k

I think I put about $13,500 into my 401k last year. My company puts in 3% of my pay, whether I contribute or not.

This year I have it set up so that they take out 30% of my pay each period. And in theory, that should put me right at the $15,000 contribution limit for the year, as I currently make $50K per year. However, any overtime and my mid-year pittance raise is going to throw that off. Once I hit that $15K limit though, the company simply stops taking it out of my paycheck. However, they'll keep investing their 3% per paycheck, as the company contribution doesn't count toward your federal limit.
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Re: Maxing out your 401k
Old 06-05-2006, 11:26 AM   #24
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Re: Maxing out your 401k

I get a company match on my 401k contributions, up to 4% of each pay check. I also max out contributions each year. As a result, I have to time my bi-monthly contributions so that I reach the $15000 limit on the dec 31 paycheck, or I leave matching money on the table. As a result, I usually adjust my withholding percentage downward when I get a raise or bonus so that my last contribution on dec 31 paycheck is at least 4% of my paycheck. Then Jan 1 I readjust my withholding percentage so I'll get back to using up the IRS limit by Dec 31 again. I talked with HR about a better way to handle this and they couldn't come up with anything. They also couldn't comprehend where all the money was coming from to make a full $15000 contribution. :

Making my contributions approximately equal throughout the year also helps with budgeting and cash flow issues. My paychecks are usually about the same amount each month.


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