Join Early Retirement Today
Reply
 
Thread Tools Display Modes
New Poster, Long time reader. have a 401k, in between jobs, question!!!
Old 01-28-2007, 03:05 PM   #1
Dryer sheet wannabe
 
Join Date: Jan 2007
Posts: 19
New Poster, Long time reader. have a 401k, in between jobs, question!!!

HI all-

I've been reading this message board for a long time, really enjoy all your insight.

I just started a new job (as of Oct. 2006) and have to wait one year before I contribute to my new 401k plan. My wife just finished grad. school and will start a job in Feb., 2007. She has to wait 6 months before she starts her new 401k plan. So she will be eligable the first of August and I will be eligalble the first of October. Both of our company have matching programs that are really aggressive (which is nice for us).

If we are able to max out both of our 401K's, can I wait until August/October and still max out our 401k's completely for the 2006 year? Is the cut off date for 2006 contributions April 15th, like IRA's? Not sure what the law allows.


thanks for any advice.
Jbird is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: New Poster, Long time reader. have a 401k, in between jobs, question!!!
Old 01-28-2007, 03:17 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
mickeyd's Avatar
 
Join Date: Apr 2004
Location: South Texas~29N/98W Just West of Woman Hollering Creek
Posts: 6,668
Re: New Poster, Long time reader. have a 401k, in between jobs, question!!!

Hey Jbird, welcome to the fray (finally).

Quote:
If we are able to max out both of our 401K's, can I wait until August/October and still max out our 401k's completely for the 2006 year?
Your Employee Benefit Plans probably have a maximum per paycheck contribution (like 12%) so you will be limited by this as to how much actual cash you can contribute probably. Whatever you do, make sure to contribute at least as much as possible so that you receive the maximum match. Cut off contributions for 401(k) are the last paycheck that you receive in the year (2006).
__________________
Part-Owner of Texas

Outside of a dog, a book is man's best friend. Inside of a dog, it's too dark to read. Groucho Marx

In dire need of: faster horses, younger woman, older whiskey, more money.
mickeyd is offline   Reply With Quote
Re: New Poster, Long time reader. have a 401k, in between jobs, question!!!
Old 01-28-2007, 03:47 PM   #3
Dryer sheet wannabe
 
Join Date: Jan 2007
Posts: 19
Re: New Poster, Long time reader. have a 401k, in between jobs, question!!!

wow, that will really limit us this year for our tax-def. investments. I guess we should max out our IRA's as well.

Thanks for the info.
Jbird is offline   Reply With Quote
Re: New Poster, Long time reader. have a 401k, in between jobs, question!!!
Old 01-28-2007, 04:06 PM   #4
Recycles dryer sheets
obryanjf's Avatar
 
Join Date: May 2005
Location: Owensboro, KY
Posts: 138
Re: New Poster, Long time reader. have a 401k, in between jobs, question!!!

Make sure you check the max as mine is 50% of each paycheck up to the IRS limit per year.

job
obryanjf is offline   Reply With Quote
Re: New Poster, Long time reader. have a 401k, in between jobs, question!!!
Old 01-28-2007, 04:12 PM   #5
Moderator
simple girl's Avatar
 
Join Date: Sep 2006
Posts: 4,006
Re: New Poster, Long time reader. have a 401k, in between jobs, question!!!

Quote:
Originally Posted by Daddy O
Make sure you check the max as mine is 50% of each paycheck up to the IRS limit per year.

job
Yes, definitely check. DH's 401K allows 30%.
__________________
simple girl
less stuff, more time

(55, married; Mr. Simple Girl, 59. FIRED 12/31/19!)
simple girl is offline   Reply With Quote
Re: New Poster, Long time reader. have a 401k, in between jobs, question!!!
Old 01-28-2007, 07:57 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Aug 2004
Location: Laurel, MD
Posts: 8,304
Re: New Poster, Long time reader. have a 401k, in between jobs, question!!!

Check with your plan(s)...the Summary Plan Description should answer your question. There are subtle differences between plans that are determined by the company, not the IRS..........For example, our plan allowed "lump sum" contributions awhile back, but they changed the rules to only permit contributions by payroll deduction. Sometimes overtime pay is eligible and sometimes only base pay.
__________________
...with no reasonable expectation for ER, I'm just here auditing the AP class.Retired 8/1/15.
jazz4cash is online now   Reply With Quote
Re: New Poster, Long time reader. have a 401k, in between jobs, question!!!
Old 01-29-2007, 08:50 AM   #7
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,855
Re: New Poster, Long time reader. have a 401k, in between jobs, question!!!

Welcome to the board, Jbird.

Individual company 401(k) plans have a surprising amount of flexibility & choices (or lack thereof). So in addition to reading about the max paycheck contribution and your match, you'll also have to become an expert on the company documents to help you make the right investment choices.

Be careful about disclosing how much you know. If you start asking too many questions about your company's plan then you may end up "helping" HR with it...
__________________
*

Co-author (with my daughter) of “Raising Your Money-Savvy Family For Next Generation Financial Independence.”
Author of the book written on E-R.org: "The Military Guide to Financial Independence and Retirement."

I don't spend much time here— please send a PM.
Nords is offline   Reply With Quote
Re: New Poster, Long time reader. have a 401k, in between jobs, question!!!
Old 01-29-2007, 01:33 PM   #8
Dryer sheet wannabe
 
Join Date: Jan 2007
Posts: 19
Re: New Poster, Long time reader. have a 401k, in between jobs, question!!!

Thanks, good information!

I first tryed to talk to the 401k company, Manulife Financial (John Hancock), and they basically told me that the max. paycheck limits are set by the company, not the plan provider. So I had to go to my HR department and ask for that info (have not heard back yet).

Basically what I am trying to decide is how much I can fill up both our 401ks with the few months that we will have at the end of the year. Then once I calculate the total amount we will be able to get into our 401k's I will put the rest in our IRA's.

I am so used to investing my retirement money monthly it's hard for me to hold out until August/October, but it is the best way to max. out our annual retirement cotribution.
Jbird is offline   Reply With Quote
Re: New Poster, Long time reader. have a 401k, in between jobs, question!!!
Old 02-03-2007, 10:17 AM   #9
Recycles dryer sheets
 
Join Date: Jul 2006
Posts: 91
Re: New Poster, Long time reader. have a 401k, in between jobs, question!!!

I did something similar when I decided to quit my job last year. I decided in April that I would quit at the end of June and since I was turning 50 that year I wanted to get all 20K in.

I was lucky that my company's limit was super high and I was able to load in all 20K (I got almost nothing on my checks of course).

Make sure you sign up right away, most plans say it takes one pay period to implement your deducation.

Good luck!
Callie is offline   Reply With Quote
Reply

Tags
401k


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Reader --> Poster transition UVaOK Hi, I am... 6 03-06-2006 09:48 PM
Hey folks, long time no see Whakamole Young Dreamers 9 06-18-2005 12:42 PM
First time poster ctech Hi, I am... 8 06-10-2005 09:23 PM
A Long way to go with little time to get there: Chris Hi, I am... 2 01-24-2004 04:26 PM
Paying off Debt vs. 401(k) Contributions BigMoneyJim FIRE and Money 4 02-10-2003 10:06 AM

» Quick Links

 
All times are GMT -6. The time now is 08:33 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.