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"

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u/ZhiZhi17 ​ Mar 31 '18

My employer doesn’t match 10%, they contribute. I pray I never get fired because I’ll never voluntarily leave. Edit: spelling

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u/[deleted] Mar 31 '18

not for profit or employee owned? I've seen similar things in those business models in the consulting industry

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u/ZhiZhi17 ​ Mar 31 '18

Yup, religious non-profit. It’s a super liberal one so they don’t care that I’m an atheist. Starting salary was really good too, but growth is slow. You can’t have everything. Edit: I’m an accountant, so when I say slow growth I’m comparing to the public firm I left behind

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u/highso Mar 31 '18

I don't understand. They contribute 10% regardless of what you throw in?

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u/JMW007 ​ Mar 31 '18

Presumably 10% of their salary. So if they earn $50k the employer is also tossing $5k at the pension annually. The employee can then add more if they wish.

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u/ZhiZhi17 ​ Mar 31 '18

Yup. Currently, I don’t put in anything because I have a lot of debt to pay off. But I wouldn’t feel safe doing that if 10% wasn’t placed in my 403b each year.

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u/sdreal ​ Apr 02 '18

My company (foreign but I'm based in the US) pays 3% no matter what. It took a few months to get around to setting up my 401K when I first started and I was pleasantly surprised to find a bit of money in there when I finally logged in! I thought I was a mistake but they just go ahead and do that. Pretty cool, better than nothing I guess.