401k went over contribution limit

[Blux]

Hello,

I had a bit of a rough 2022. Had to close down a multiple generation family business. I worked a short time in 2022 at that job and was contributing to a regular pre-tax 401k. I had contributed around $1400 for the year.

I started a new job and saved aggressively in a Roth401k which wasn't an option in my family business' 401k.

Anyway I planned on saving the full amount including catch-up contributions, but had forgotten that I had worked for a short time in the family business(and contributed to the 401k).

Anyway, I am about $500 over for the year. I had rolled over my previous 401k to an IRA and now the entire 401k from the family business has been closed up.

My new 401k is with empower and I use a broker option for the bulk of the money going into the roth 401k. The broker option is thru NexInvestor.

Since my old 401k is "closed", is the best way to resolve this issue to take a refund from my new employer that uses Empower?

Anything special I need to do?
Will this haunt me for years to come?

 

[njhowie]

This Motley Fool article says exactly what to do:

https://www.fool.com/retirement/plans/401k/over-contribution/

 

[cathy63]

...
Since my old 401k is "closed", is the best way to resolve this issue to take a refund from my new employer that uses Empower?

Anything special I need to do?
Will this haunt me for years to come?

You can do it either way, but I would take it from your current employer's plan because that's likely to be the easiest way. Just call them and tell them that you had an excess contribution because you had two jobs last year and you need to remove the last $xxx that you deposited. This is not the first time they've heard this. They have a form for you to fill out and they know how to fix it. It is not going to haunt you for years to come.

 

[Car-Guy]

For probably at least the last 10 years I worked, I went over the limit every year. My employer would "automatically" move the funds that went over from my tax deferred account to my tax paid account (after they took out the taxes on the excess). Of course that was just with one employer...