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Is the $18,500 cap for 401K eapplicable to employer matching?
Posted on 6/19/15 at 3:35 pm
Posted on 6/19/15 at 3:35 pm
Or does it apply to the individual's contribution only?
I get half matching to 10. So let's say I make $150k and put $15,000 into my 401k. That would put my total at $22,500. Would I have to pay taxes on the $4000 excess of $18,500?
I get half matching to 10. So let's say I make $150k and put $15,000 into my 401k. That would put my total at $22,500. Would I have to pay taxes on the $4000 excess of $18,500?
4
Posted on 6/19/15 at 3:40 pm to mule74
The $18,000 cap is the max amount you can contribute. The match does not count towards your cap, it has a seperate cap.
EDIT: $18,000, not $18,500.
EDIT: $18,000, not $18,500.
This post was edited on 6/21/15 at 8:51 pm
Posted on 6/19/15 at 3:40 pm to mule74
It's my understanding that the deferral limit for 2015 is 18k of YOUR contributions. Total limits (including employer match) is 53k. Depending on your age (over 50) there is also an employee catch up contribution of 6k in 2015.
Posted on 6/19/15 at 3:42 pm to mule74
$18,000 cap is for individual contributions.
$53k, combined cap
$53k, combined cap
Posted on 6/20/15 at 5:47 am to mule74
followup question. Say I am on pace to contribute more than $18,500 this year. Will my employer automatically stop withdrawing from my paycheck, or do I need to change my withdrawal %?
Also just for another data point, my company matches 100% up to 5%. But they also contribute another 5% (based on my years of service) without needing me to contribute. So, if I put up 5%, my 401k really gets 15%. I think this is pretty good, but we don't have any kind of pension or other retirement savings vehicle.
Also just for another data point, my company matches 100% up to 5%. But they also contribute another 5% (based on my years of service) without needing me to contribute. So, if I put up 5%, my 401k really gets 15%. I think this is pretty good, but we don't have any kind of pension or other retirement savings vehicle.
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