Originally Posted by
kronan
No, that's NOT what it means. There are 2 Caps associated with DC limits.
One is the Salary Cap, currently at 275k. Once you hit that Salary Cap, the 8% (9%) Contribution from the Company Stops...and, as TonyC said, your contribution rate for the rest of the year is 0%. So, effectively, for a WB Capt---your actual B fund Contribution is say in the 5% range of your annual compensation.
The Other DC limit is the Combined Contributions that you can defer, this year pretty sure it's 55k. That amount is the Company's B fund Contributions, 401 Contributions, and potential After tax contributions.
(A big After Tax contribution early in the year can impact on the "free" money from the Company and that is why Our Union recommends a max of a 5% After Tax contribution. Personally, I suggest starting with something like 3% and then ramping it up after the B fund contributions limit is hit)
This is what I said.
Truth is TonyC reversed the actual limits
401(a)17 limit is 275k. Beyond which Mgt makes No additional Contributions, regardless of whether the B plan rate is 8%, 9%, or 20%
the 415(c)(1)(a) limit is 55k. Beyond which no DC contributions are possible (other than Catch-up for those of us at least 50 in any given year).
A 20% B fund would result in a 55k input to your B fund, means 0 dollars available to contribute to your 401k Traditional or Roth, and no Aft Tax dollars available for the eventual Big Roth IRA roll over.
And also means once your Income hits 275k, no additional money comes your way
currently