TheHaitian
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Post by TheHaitian on Sept 22, 2020 21:35:26 GMT -5
I hate leaving money on the table with my employer but it seems I have miscalculated.
So with the latest round of bonuses to be paid out this Thursday (but they posted the paystub online today by accident I guess) I have maxed my 401k for the year already.
My company does their matching by pay period, not overall contribution for the year. So since I will no longer be contribution for the next 7 remaining pay period, I will not get the match then.
This year was the best so far thanks 100% to covid; total bonus for the year : $23,972.75
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busymom
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Post by busymom on Sept 22, 2020 21:57:09 GMT -5
Nice bonus! Can you take the money you won't be contributing, and invest it somewhere else? If nothing else, it doesn't hurt to pad your emergency fund, too.
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Knee Deep in Water Chloe
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Post by Knee Deep in Water Chloe on Sept 22, 2020 22:10:43 GMT -5
Can you ask them about matching in the last quarter? The worst they can say is no.
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thyme4change
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Post by thyme4change on Sept 22, 2020 23:28:50 GMT -5
I hate leaving money on the table with my employer but it seems I have miscalculated. So with the latest round of bonuses to be paid out this Thursday (but they posted the paystub online today by accident I guess) I have maxed my 401k for the year already. My company does their matching by pay period, not overall contribution for the year. So since I will no longer be contribution for the next 7 remaining pay period, I will not get the match then. This year was the best so far thanks 100% to covid; total bonus for the year : $23,972.75 Nice!! We are also having a banner year. I can't wait to see my bonus.
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TheHaitian
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Post by TheHaitian on Sept 23, 2020 1:08:34 GMT -5
Nice bonus! Can you take the money you won't be contributing, and invest it somewhere else? If nothing else, it doesn't hurt to pad your emergency fund, too. Thanks and I plan on doing that (emergency fund) and paying down some debt.
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TheHaitian
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Post by TheHaitian on Sept 23, 2020 1:09:14 GMT -5
Can you ask them about matching in the last quarter? The worst they can say is no. I can but not holding my breathe. Big company owned by bigger company, so rules tend to be across the board with no exceptions made.
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TheHaitian
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Post by TheHaitian on Sept 23, 2020 1:16:42 GMT -5
I hate leaving money on the table with my employer but it seems I have miscalculated. So with the latest round of bonuses to be paid out this Thursday (but they posted the paystub online today by accident I guess) I have maxed my 401k for the year already. My company does their matching by pay period, not overall contribution for the year. So since I will no longer be contribution for the next 7 remaining pay period, I will not get the match then. This year was the best so far thanks 100% to covid; total bonus for the year : $23,972.75 Nice!! We are also having a banner year. I can't wait to see my bonus. Me too... I cannot wait till next one. We usually get only 1 bonus in March, but so far this year got our regular one in March which was ~12.5 k for me, a small one in April and another small one in May. Then out of nowhere they announced they were going to give us another one September. But the 2 smaller ones and the one in September (total ~11.5k for me ) is an advance from our next March Bonus. Rumor has it the company made money like crazy and seating on a lot of cash, this is one way to get ride of it and pass on the taxes to us. Also everyone is expected to max out, and if I max out I get 40% of my salary in bonus (if I do, rare are the stores that do but COVID makes for a different animal) that is $32,800. So planning ahead, they did not want to have to hand out bunch of 20-30-40k checks next year around bonus time, and figure it was better to break it up and give some this year and the rest in March next year. Some people are salivating because people like my boss that are store directors can get up to 70% of their salaries in bonuses if they max out... so if you are making 150k a year, that is another salary you are bringing home. 2 years back a store director went out and bought a brand new BMW with his bonus check... Stories like that is what fools like us hang on to this stupid ungrateful taxing long hours not family friendly job.
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alabamagal
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Post by alabamagal on Sept 23, 2020 3:38:14 GMT -5
So I am guessing your “problem” is that your employer takes out 401k withdrawals from your bonus but does not match for the bones? So you met your IRS limit, but are missing out on a couple months employer contribution? So the unexpected Sept bonus has messed up your plan.
The way to maximize the match then is to stop 401k contributions for bonuses and set your % for regular paychecks to reach its limit on final paycheck. This would work if bonus is in separate pay period, and you had easy and reliable way to quickly adjust your 401k withholding.
My last employer did 401k withholding and matched for bonus. So I think you would max out match if you hit limit early. Prior employer did not withhold for bonus, so easier to plan. Just figure out the math and plan accordingly. With a minor paperwork (or computer) change you could get a few thousand $. Even if it is counterintuitive to stop (and then start) 401k.
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plugginaway22
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Post by plugginaway22 on Sept 23, 2020 5:44:41 GMT -5
Yes, I set it up to contribute $1000 per 26 paychecks to receive full match and max my contribution. Bonus is not affected.
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Deleted
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Post by Deleted on Sept 23, 2020 7:40:42 GMT -5
So I am guessing your “problem” is that your employer takes out 401k withdrawals from your bonus but does not match for the bones? So you met your IRS limit, but are missing out on a couple months employer contribution? So the unexpected Sept bonus has messed up your plan. The way to maximize the match then is to stop 401k contributions for bonuses and set your % for regular paychecks to reach its limit on final paycheck. This would work if bonus is in separate pay period, and you had easy and reliable way to quickly adjust your 401k withholding. My last employer did 401k withholding and matched for bonus. So I think you would max out match if you hit limit early. Prior employer did not withhold for bonus, so easier to plan. Just figure out the math and plan accordingly. With a minor paperwork (or computer) change you could get a few thousand $. Even if it is counterintuitive to stop (and then start) 401k. Not everyone has that level of control over their contributions though. We can't set a dollar amount per pay period, it's only a percentage, and can't stop contributions for bonuses. Well...I COULD...if I knew exactly when a bonus was coming and timed the contribution percentage change perfectly, but we never know the exact date they're coming (if they are at all). Since my paychecks are so variable with OT it's just a crapshoot. I maxed out last year a couple months early and was just SOL for the 4% match on about 5K in earnings. HR claimed there was a true-up contribution the following year if that happened, but I never saw that money added.
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giramomma
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Post by giramomma on Sept 23, 2020 8:31:54 GMT -5
My son works at a grocery store. I think he gets almost as much in bonuses as in real pay. He gets paid weekly, and his actual check last week was like $40. His Bonus check was $200. He's going to have a huge case of the sadz when Covid is done.
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irishpad
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Post by irishpad on Sept 23, 2020 9:15:50 GMT -5
I just think it is great (and just) that the grocery stores are giving bonuses to their employees at this time. On a regular basis I've also been tipping the checkers and bag persons.
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Artemis Windsong
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Post by Artemis Windsong on Sept 23, 2020 10:53:56 GMT -5
I'll get a $3 bump up for Soc. Sec.
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irishpad
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Post by irishpad on Sept 23, 2020 15:44:58 GMT -5
I'll get a $3 bump up for Soc. Sec. I know it's not much of a bump, but know that most places aren't giving any raises this year so you are ahead of the rest of us! lol
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haapai
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Post by haapai on Sept 23, 2020 16:23:49 GMT -5
I ran into a situation like this a couple of years ago when I temporarily suspended all 401(k) contributions. At the time, the company matched 20% of the first 5% put into a 401(k) plan. (It also vested over seven years, which is a factor in why I was willing to leave it on the table when financial stresses hit.) I'd been contributing over 10% prior to a period of financial instability, then I dropped my contributions to zero.
To my surprise, a got a big employer contribution to my 401(k) in early January of the next year. Apparently, the company did an end-of-year calculation of 401(k) matching that they didn't publicize very much.
You may get a similar surprise if you have been contributing more to your 401(k) than the amount necessary to get the full match.
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lynnerself
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Post by lynnerself on Sept 23, 2020 17:35:27 GMT -5
I was fortunate that I could set an exact dollar amount for my 401k contributions (Max divided by 26 pay periods)
The problem I ran into every year with the payroll program is that it didn't account for the "catch up" contribution. And would stop deductions (and match) when it reached the regular limit. Then I would have to go in and have them manually fix it.
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nidena
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Post by nidena on Sept 23, 2020 20:40:35 GMT -5
The new job I started Monday has a 4% match. It's the first time I've worked anywhere that that option was available to me so I'll definitely be scouring the payroll paperwork to make sure I check the right box to elect "yes" to the full option I don't think I've encountered the right paperwork yet though.
Question: Is matching based on net or gross?
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haapai
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Post by haapai on Sept 23, 2020 22:00:04 GMT -5
Gross.
It's a rare 401(k) plan that allows you to put a set dollar number into a 401(k) per paycheck. Almost all of them limit you to putting a certain percentage of your gross pay into a deferred comp plan and it is rare for them to allow you to specify fractions of a percent. On the other hand, it's now quite easy to alter 401(k) contributions. In the past, there were limitations on how often you could change the percentage that you wanted to contribute and doing so involved filling out paperwork, submitting it to someone that you worked with, and praying that they submitted the change request in a timely manner and didn't gossip about it. It's rather nice to be able to make those changes to contribution level at a computer terminal and not set off speculation that you are hard-up, planning on leaving, or recently flush.
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TheHaitian
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Post by TheHaitian on Sept 24, 2020 1:56:20 GMT -5
Yes, I set it up to contribute $1000 per 26 paychecks to receive full match and max my contribution. Bonus is not affected. For my job you can only do percentage... Been maxing since 2017 and at the beginning of the year I put it at a percentage that would allow me to max by the end of the year over 24 pay periods. So example this year it would take 23.7% of my salary to max over 24 paychecks so I had it set up at 24%. After the first round of bonus in March, I recalculated it and lowered it to 20%. After the 2 surprises bonuses in both April and May, I recalculated again and this time reduces it to 15%. I was thinking after this round of bonus was announced I would lower it to 6% or 10% but bonus was bigger and it maxed. So for the rest of the year I will not get the company match.
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TheHaitian
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Post by TheHaitian on Sept 24, 2020 1:59:32 GMT -5
I ran into a situation like this a couple of years ago when I temporarily suspended all 401(k) contributions. At the time, the company matched 20% of the first 5% put into a 401(k) plan. (It also vested over seven years, which is a factor in why I was willing to leave it on the table when financial stresses hit.) I'd been contributing over 10% prior to a period of financial instability, then I dropped my contributions to zero.
To my surprise, a got a big employer contribution to my 401(k) in early January of the next year. Apparently, the company did an end-of-year calculation of 401(k) matching that they didn't publicize very much.
You may get a similar surprise if you have been contributing more to your 401(k) than the amount necessary to get the full match.
Fingers crossed they will... I think it suck that I miss out because I contribute too much too soon . Not including bonus it takes ~23.7% of my salary to max and Including bonus It takes ~18.5%... while all I have to contribute to get the max is 6%. So really if there is someone that should get the 4% match for contributing 6% is me... but because I maxed early, I may not.
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TheHaitian
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Post by TheHaitian on Sept 24, 2020 2:04:25 GMT -5
My son works at a grocery store. I think he gets almost as much in bonuses as in real pay. He gets paid weekly, and his actual check last week was like $40. His Bonus check was $200. He's going to have a huge case of the sadz when Covid is done.
I know after March of next year I will also because we already been noticing sales going down with all the restaurants opening back up... folks are sick and tired of cooking. We have to cut hours of our part timers and it has been a shock to their system, getting scheduled 30-35 hours to now 16-24 hours.... if that. But my current store we have gone from making 150k-200k/day to now ~80-90k/day; 100-120k on weekends. All restaurants in the DMV area are packed/booked solid up to the allowed availability (and a lot of them going above that if they can get away with it). We have been talking at my job how U street and Adams Morgan are packed in weekends, no one following guidelines, wearing masks or distancing and the police turning a blind eye because as one told me: not worth their time.
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TheHaitian
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Post by TheHaitian on Sept 24, 2020 2:08:29 GMT -5
So I am guessing your “problem” is that your employer takes out 401k withdrawals from your bonus but does not match for the bones? So you met your IRS limit, but are missing out on a couple months employer contribution? So the unexpected Sept bonus has messed up your plan. The way to maximize the match then is to stop 401k contributions for bonuses and set your % for regular paychecks to reach its limit on final paycheck. This would work if bonus is in separate pay period, and you had easy and reliable way to quickly adjust your 401k withholding. My last employer did 401k withholding and matched for bonus. So I think you would max out match if you hit limit early. Prior employer did not withhold for bonus, so easier to plan. Just figure out the math and plan accordingly. With a minor paperwork (or computer) change you could get a few thousand $. Even if it is counterintuitive to stop (and then start) 401k. Not everyone has that level of control over their contributions though. We can't set a dollar amount per pay period, it's only a percentage, and can't stop contributions for bonuses. Well...I COULD...if I knew exactly when a bonus was coming and timed the contribution percentage change perfectly, but we never know the exact date they're coming (if they are at all). Since my paychecks are so variable with OT it's just a crapshoot. I maxed out last year a couple months early and was just SOL for the 4% match on about 5K in earnings. HR claimed there was a true-up contribution the following year if that happened, but I never saw that money added. Same here we cannot set a $$$ only percentage. And sometimes not given enough notice to make changes to our 401k, more so for us salaried managers that get paid twice a month. Sometimes I catch , ex the March one is expected every year so usually increase my contributions to 30% and it may affect 1 (or 2 If I forget to change it back) check of that period + bonus checks ... but the last 3 this year were announced kinda last minute and not enough time to make proper evaluation till after.
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plugginaway22
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Post by plugginaway22 on Sept 24, 2020 5:57:57 GMT -5
My company does a 'true-up' in December, so if you didn't get full match for some reason throughout the year, it is added on last payroll of the year. I believe these rules are driven by your plan document.
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teen persuasion
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Post by teen persuasion on Sept 24, 2020 6:40:44 GMT -5
I was fortunate that I could set an exact dollar amount for my 401k contributions (Max divided by 26 pay periods)
The problem I ran into every year with the payroll program is that it didn't account for the "catch up" contribution. And would stop deductions (and match) when it reached the regular limit. Then I would have to go in and have them manually fix it.
DH has always had to set a %. Last year, his deductions got cut off at the regular limit, in mid December, and I thought we'd not be able to fix it in time to restart before the end of the year, because he could only make changes to deductions QUARTERLY via paperwork (previously at another employer he could make immediate changes online at any time, so nice). I also thought I'd missed something on the paperwork (when we'd filled it out at the beginning of the year), like a separate line item for catchup contributions. Nope, there was nowhere to designate catchup contributions. When he explained the situation to HR, they admitted there was ONE other person who contributed enough to pass the regular limit. They now knew she would, and just sat down with her annually to hash out the details in person. They restarted the contributions for DH, and adjusted to make up the lost contributions before the end of the year. Then they proudly sent him their new-and-improved 401k elections form - he'd forced them to update the form to handle catchup contributions, and figured he needed to redo his options for the upcoming year. Everybody was confused when I said, nope, not contributing that much next year! What they didn't know was that I'd finally gotten access to a SIMPLE IRA at my job, so I'm playing catchup and maxing mine by reducing his proportionally. Just recently DH's employer changed rules to allow monthly changes instead of quarterly. Still no online change access, though.
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resolution
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Post by resolution on Sept 24, 2020 6:59:16 GMT -5
I can designate the exact dollar amount and change it online any time I want to, but its a crapshoot when they will actually make the change to my pay. It could be as soon as the next pay period but I have had it take as long as 3 months, with multiple phone calls on my end to ask why it was taking so long. Usually it takes a month to a month and a half.
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Deleted
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Post by Deleted on Sept 24, 2020 7:40:42 GMT -5
I can designate the exact dollar amount and change it online any time I want to, but its a crapshoot when they will actually make the change to my pay. It could be as soon as the next pay period but I have had it take as long as 3 months, with multiple phone calls on my end to ask why it was taking so long. Usually it takes a month to a month and a half. Same here...only with the percentage. I can go online to Prudential and change it, but then it has to get sent to payroll somehow and I imagine it's a manual change for them. Sometimes they update it by the next check (paid biweekly), sometimes it's the check after. Then to swap it back would be another check or two. Even if I had a pretty solid idea of when a bonus was hitting, I could still easily miss it.
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Lizard Queen
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Post by Lizard Queen on Sept 24, 2020 7:57:41 GMT -5
I'm part-time, so apparently I don't need to worry about saving for retirement.
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Tiny
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Post by Tiny on Sept 24, 2020 9:59:39 GMT -5
I get the "let down" of not getting all the employer offered matching contributions... but it's not thru any direct fault of yours AND it's because you earned MORE money than expected. I wouldn't beat myself up too much. You are still out ahead of most people. You still got more from 2020 than you originally expected. It's a win! You can't have it all. Or in the words from the Princess Bride: Life is Not Fair.
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Deleted
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Post by Deleted on Sept 24, 2020 10:06:33 GMT -5
I'm part-time, so apparently I don't need to worry about saving for retirement. That's because your managers are all getting huge bonuses while paying everyone else shit and cutting their hours? /sarcasm My son is getting laid-off from WalMart along with 75 other people at his store who worked through a deadly pandemic for their business. He's worked there over a year and makes a whopping $12 an hour and despite working nearly full-time for that entire time, he's still "part-time" and qualified for no benefits. Last week, they changed his hours from the usual 38 down to 15 and told him he will soon not have a job at all. DS had an interview yesterday for a different job. It will likely pay less, since min-wage in OR is only $11.25 an hour, and I assume will also be part-time because God forbid should any employer ever have to offer benefits.
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Rukh O'Rorke
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Post by Rukh O'Rorke on Sept 24, 2020 10:19:16 GMT -5
It is difficult to judge how to work this with employers always being pretty crafty about bonus amounts.
One year I hadn't put as much to retirement as I would have liked, and an unexpected end of year bonus was a full paychecks worth. I could have upped to 50% and gotten some money in, but of course no warning so was only doing like 8%....haha so that money got spent instead....there was no match with that employer, but even so - contributions were impacted by that secrecy around bonus amounts.
current employer does 4% no matter what, additional 3% based on your contribution up to 6%. I was just doing 6% earlier in the year so still have a lot left to contribute - I think I'm currently at about 25 or 26%? It is difficult to keep this up....hope I can max this year, as I haven't in quite a few years.
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