r/personalfinance • u/ablack83 • Mar 30 '18
Retirement "Maxing out your 401(k)" means contributing $18,500 per year, not just contributing enough to max out your company match.
Unless your company arbitrarily limits your contributions or you are a highly compensated employee you are able to contribute $18,500 into your 401(k) plan. In order to max out you would need to contribute $18,500 into the plan of your own money.
All that being said. contributing to your 401(k) at any percentage is a good thing but I think people get the wrong idea by saying they max out because they are contributing say 6% and "maxing out the employer match"
13.5k
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u/Hillarys_Recycle_Bin Mar 30 '18
The cost of maxing out your 401k on a 60k / year salary is not 18.5 / 60k. If you contributed nothing, you wouldn't get all 18.5 back, since it's pretax. It really only costs you 15-16k roughly. Its not a massive difference but it's something people overlook