Yes, it might sound trivial for most people on this forum, but is significant for me!

My employer’s 401k does not offer true-up match. I used to max out my 401k by Sept/Oct and would lose out on the employer match portion (a few hundred bucks) every year that would have been deposited if I was still contributing to the 401k for the rest of the year.

I discovered this in 2019. Yes, the story of why I discovered it so late belongs in the “antimustachian” forum. By my calculations, my 401k/rollover-IRA balances would be several tens of thousands higher had I discovered this when I started maxing out my 401k.

Nevertheless, I took steps to remedy this for 2020. It basically involves adjusting the contribution rates precisely a couple of times – once at the beginning of the year and once after the yearly bonus. The aim is to make sure that I am contributing *at least* = monthly employer contribution amount till the very last paycheck.

Today morning, I saw the following in the 401k website (image attached):


If the annual bonus is variable and/or at the end of the year, another technique would be to see if the employer will match on post-tax contributions.  Then have your pre-tax contributions switch to post-tax contributions once you’ve met the $19,500 limit.  Even better if you can then roll those post tax contributions into an IRA via the “mega back door” Roth…assuming your plan allows for in plan conversions. 

One of the many reasons I’m happily FIRE is that my employer only matched every paycheck. You had to deposit the exact amount every pay period. No front loading, no truing up, etc. Given that we were straight commission, it was an extremely difficult target to hit. I finally stopped trying and stopped worrying about it. In the end, I got to FIRE anyway, and you will, too. Congratulations!

This content was originally published here.

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