This might be a really, really dumb question but I've never actually done this before. If I wanted to contribute the annual maximum to my 401k ($18,500 in 2018), how do I make sure that I hit that amount by next year?
Is it as simple as just figuring out my annual take-home income, and figuring out the percentage that $18,500 is? For example, if I make $100k pre-tax annually, then $18,500 / $100,000 = 18.5%, so I tell my employer to contribute 18.5% from each of my paychecks?
What happens if I started contributing late in the year? Can I contribute one-off amounts for a few paychecks to catch up?
What happens if I legit put down at the start of the year that I want to contribute 33% of my paychecks to my 401k and as a result, I hit the legal maximum in the middle of the year? Is my employer supposed to automatically detect this and stop my contributions, or will I have to pay a penalty at tax time next year?
Submitted January 17, 2018 at 08:47PM by aceshades http://ift.tt/2B9daS2
