- Major
(https://www.airlinepilotforums.com/major/)
- - Direct Contribution ???
(https://www.airlinepilotforums.com/major/126783-direct-contribution.html)
Smooth at FL450
01-19-2020 07:23 PM
Originally Posted by cesnacaptn
(Post 2960035)
Does it matter if you get your employee contribution in first (other than time in the market)?
Yes it matters. At my company, any overage in company contribution comes back as taxable cash in the paycheck unless you've selected some of the other investment options. If I waited too late to start my 19.5 contributions, they could just get squeezed out with no ability to get caught up.
C2078
01-20-2020 06:30 AM
Actually $63,500 if over age 50.
Blue Dude
01-20-2020 08:44 AM
Originally Posted by cesnacaptn
(Post 2960146)
In that case, my point stands. If you make more than $285k this year and your company is going to contribute at least $37,500, it doesn’t matter if you max out your $19,500. You’re either going to pay taxes on the cash over cap or you pay taxes on the money you weren’t able to contribute because you reached the $57,000.
In a cash over cap scenario, with a full 401k at the 415c limit but you weren't able to make your full $19,500 contribution, the results are the same if you're putting in traditional. If doesn't matter if you put in $15,000 or $19,000 if it's in traditional dollars. It does matter for Roth though, because you pay taxes on each additional Roth dollar to buy their and their earnings' post-tax basis for future years.
Blue Dude
01-20-2020 08:46 AM
Originally Posted by C2078
(Post 2960402)
Actually $63,500 if over age 50.
No. The 415c limit is the same $57,000 regardless of age. You do get a separate $6,500 catch-up allowance at age 50 but that's it's own thing. Common mistake.
