Cisco 401k Plan
Interested in learning about the 401k contribution plan @ Cisco. Illustration: Employee has a base of $100,000. Match will be $4,500. Could the employee do the following in 2020? - Contribute $19,500 to 401k Traditional - Get matching from Cisco of $4,500 - Contribute $34,000 to 401k After Tax Thanks!
Yes you can, but only to the total 401k limit for employer + employee contributions. Cisco even has an option to do the Mega backdoor Roth, allowing you to convert after tax contributions into Roth contributions. Conversion takes place at the end of each market day.
Thanks for the reply. I am a tad confused. Could you please confirm if the employee, as per my illustration, can do $19,500 (Traditional 401k) + $4,500 (Employer Match) + $34,000 (After-Tax 401k)?
Yes you can do!
This sounds like a pretty great 401(k) program right?
Match is 4.5%, not $4,500. It could be much higher than $4,500. And yes, you can also contribute after tax up to IRS limit.
Thanks for the reply. I am aware that the match is 4.5%. I mentioned $4,500 based on the hypothetical base salary of $100,000. Good to know that the employee can do both pre-tax and post-tax contributions up to the federal limit.
Your bonus can also be counted towards your contributions and the company match