FlyGuy2002

this is incorrect . An individual can put in $19,500 of their own monies into a 401k. The DC will continue until $57,000 is reached. At spirit, If I contribute $19,500 and the company puts in $27,500 (assuming I make enough), any monies above the $57,000 max will
be paid is income and fully taxed. The employee is always allowed to max out their own share . $19,500 and $26,00 respectively

gringo

Minor point; regardless whether you contribute a dime to your 401k or max it out, the company will DC up to $37k into your account. Once that number is hit, the DC into the 401k stops, but the money accrues for the rest of the year, to be paid out in January.

nuball5

Do any of the majors have it where when you go over the 56K max you lose the excess for the rest of the year?

gollum

Which part are you saying is incorrect?

1. The income limit for calculating direct contributions

or

2. Hitting the combined contribution limit prior to reaching the individual contribution limit?

sailingfun

His post is correct. The cap on overall wages (285,000 for 2020) has bit many pilots at Delta.

herewego

In the meantime You are contributing the max to the TSP, right?

Silver02ex

His post is correct, we didn’t really have this problem at Spirt last year because we had a 12% DC. Delta has a 16% DC and if some pilots maxed out the $19.5K early, the company doesn’t have to put as much in, to hit the combined limit.

Qotsaautopilot

you still get the money at spirit though. It will be paid this month. Any overage from last year will come on your paycheck. Most airlines have a provision for this. It’s just about when and how it gets paid out that’s specific to each contract. We don’t need to over think it. Everyone gets their full DC percentage of their entire gross wages one way or another

Big E 757

There is one airline, at least, where once the 415(c) limit (employee+employer contributions) is reached, the company keeps the overage. I can’t remember whether it’s AA, FDX, or UPS.

gollum

This is a good point too, for those who are are still in the guard/reserve. any TSP contributions count against your individual contribution limit of 19,500 and the combined contribution limits of 57,000. It is really important to note, you can exceed the individual contribution limit with Combat Zone Excluded income up to the combined limit. So in other words, lets say you are on a 6 month deployment and you are receiving CTZE pay. You can in effect put up to 57,000 in to TPS, provided you make at least that amount in mil pay and can actually afford to put it all into TSP that year from tax excluded money. However doing so would limit the Direct contribution funds the airline could put in your 401K as the 415c limit applies to ALL employer sponsored accounts.

Example:

Deployed Jan - Jun and you can afford and decide to max out your TSP at 57,000.

You return to work at the airline Jul-Dec, none of the 16% DC from the airline would be permitted to go into your 401k as well as the "make-up" Direct contributions the company has to give you based on what you would have earned in during the deployment. What happens to that money is dependent on your contract.

The important part here is that your airline retirement account has no way to know how much you put into TSP so it will not be caught until you go to file your taxes.