Before I started thinking about min-maxing my investing, I didn't think about employer matching at the megacorp I'm at. I dialed up my contrib % as much as I could and knew I would get the half-percent employer match for each employee percent, capped at 3%-for-6%.
Over a decade later, I'm beginning to wake up and worried that I was leaving money on the table because at 15% I would hit the annual employee pre-tax limit earlier and earlier, leaving months where I'm not contributing... and not getting matched? My megacorp plan doesn't do anything awesome like flip your contrib amounts to post-tax upon hitting annual cap, or even highlight & suggest doing something so prudent. Instead DW and I would enjoy this initially holiday-timed paycheck "windfall" in true consumer fashion - both of us, in fact, as we both work at same megacorp. But from some of the lit I'd started to read, I worried the employer contribs were true matches, in the sense that if we capped early, we'd also end the employer contribs early. Semi-elaborate modeling ensues to calc the perfect employee contrib percentage, including estimated bonuses... DCA goodness... all set to change our elections soon.
Last night perusing the 401k account, salving the recent losses with yesterday's gains, and I notice megacorp has been making its contribs all along, well after my now-Sept capping. I'm feeling Huh?! and Awesome! at the same time. Reply back from the benefits folks confirms this is by design.
I still want us to reshape our per paycheck 401k contribs and ideally double-down & add in some post-tax, but it's great to settle my concern about the employer matching. I continue to be surprised and delighted at the depth of complexity available in the world of personal investing The More You Know...
Over a decade later, I'm beginning to wake up and worried that I was leaving money on the table because at 15% I would hit the annual employee pre-tax limit earlier and earlier, leaving months where I'm not contributing... and not getting matched? My megacorp plan doesn't do anything awesome like flip your contrib amounts to post-tax upon hitting annual cap, or even highlight & suggest doing something so prudent. Instead DW and I would enjoy this initially holiday-timed paycheck "windfall" in true consumer fashion - both of us, in fact, as we both work at same megacorp. But from some of the lit I'd started to read, I worried the employer contribs were true matches, in the sense that if we capped early, we'd also end the employer contribs early. Semi-elaborate modeling ensues to calc the perfect employee contrib percentage, including estimated bonuses... DCA goodness... all set to change our elections soon.
Last night perusing the 401k account, salving the recent losses with yesterday's gains, and I notice megacorp has been making its contribs all along, well after my now-Sept capping. I'm feeling Huh?! and Awesome! at the same time. Reply back from the benefits folks confirms this is by design.
I still want us to reshape our per paycheck 401k contribs and ideally double-down & add in some post-tax, but it's great to settle my concern about the employer matching. I continue to be surprised and delighted at the depth of complexity available in the world of personal investing The More You Know...