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Stupid Question 401K Limits

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  • Stupid Question 401K Limits

    I'm trying to figure out what percentage of our paychecks should go to our 401K this year.  Does the yearly contribution limit include employee contributions PLUS the company match?  For example: Employee contribution 16,000 + Company match 2,500 = total of 18500

    Or should I just put a full 18500 of my own money in and let the company match be on top of that 18500 so that the final number is greater than 18500?

    Just wondering how that works since this will be the first year we attempt to max out both.  Thanks!

  • #2
    It's 18K for 2017, not 18.5K

    Yearly contribution limit is 54K for 2017 but you can only put in 18K, employer does the rest. (well some plans you can contribute the employer part but that is rare)

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    • #3
      Elective deferral limit is still $18,000.

      https://www.irs.gov/uac/newsroom/irs-announces-2017-pension-plan-limitations-401k-contribution-limit-remains-unchanged-at-18000-for-2017

      Contributions other than elective deferrals, i.e. employer contributions (such as those made by "employer-you") can bring each unrelated employer account up to $54,000 starting 2017 (up from 53k).

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      • #4
        ...no stupid questions. :-) The fact that you thought to ask it therefore renders it not stupid. Remember the Socratic paradox.

        I get that legal-speak has to be written in such a manner, but some of that stuff, I swear, is written purely to be confusing.

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        • #5
          Add $6,000 to the annual employee contribution limit if you're 50+.

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          • #6
            Great!  I'll be setting up our new paycheck contributions so we get a full 18k from our checks.  Glad I asked!

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