This is the first year that I am going to be able to actually contribute the annual maximum of $18,500 to my 401k. The question I have is, how do I get to that number exactly by the end of the year, and what happens if I go over? My company only allows % deductions for the 401k, and I have a compensation plan that is 50k base salary and between 75-100k bonus based upon profit sharing on a monthly basis. What I'm doing right now is using a best guess number right in the middle, and basing my % contribution from that. But it could easily exceed $18,500 by the last couple months of the year if things go well. I review the contribution monthly to see if I need to make any major adjustments based upon my current total for the year, but I won't be able to do anything about the December, which is typically the month with the most variance in my bonus.
I looked around quite a bit and I can't seem to find a simple answer on this. If my contributions go over, does it just not take any more money out of my checks once I hit $18,500? Does it get kicked back out to me at the end of the year? Do I get some kind of penalty? Does the extra money go into the 401k but it is taxed? I just don't want to screw this up, and I can use my Roth IRA for overflow if needs be.
Thanks for the help!
Submitted March 31, 2018 at 09:43AM by Lurker117 https://ift.tt/2pTXrn7
