Max Contribution amount plus 5%

[Diesel]

I understand the maximum allowable contribution for 2009 is $16,500 and that is $634 per pay period based on a 26 pay period year.

I've always done a percentage donation in the past and never attempted, until now, to max out my yearly contribution.

My question are:

Is the $16,500 limit my contribution limit only? Does it not include the 5% matching that the institution contributes? In other words will $634 come out of my pay and the 5% added onto that amount? Will I go over the limit of $16,500 if that is the case or do I have to calculate our pay raise/step increases throughout the year?

Or,

Does finance compute the fact of your 5% matching and back down your contributions so that you do not exceed the $16,500 cap?


I sincerely hope that made sense.

Thanks in advance.

 

[Show-me]

Is the $16,500 limit my contribution limit only? Does it not include the 5% matching that the institution contributes? In other words will $634 come out of my pay and the 5% added onto that amount? Will I go over the limit of $16,500 if that is the case or do I have to calculate our pay raise/step increases throughout the year?

If you use $634 a pay period for 26 pp, you will be right on the money. Matching funds do not count toward the limits, just YOUR contributions.

Does finance compute the fact of your 5% matching and back down your contributions so that you do not exceed the $16,500 cap?

Finance will not help you at all, they do not monitor this.

 

[Diesel]

Thanks Show-Me. I'm tracking now.

 

[ATCJeff]

Another way you can contribute.

I call it front loading. Why contribute more at the beginning of the year? Because I think in January 09 the markets will be much lower than December 09. I want the earnings! Now how do you front load?

Figure what value is 5% of your pay. Subtract that figure from the $16500. Now you can contribute as much of this figure as you want at the beginning of the year. The higher your pay, the easier it is to do this method. In my case, I will spread the extra out over the first five or six pay periods. Then starting with pp seven I will only contribute the 5%.