I am always confused about how to save just the limit for 401k. Here below are what I would like to achieve.
Target:
1. Save just the limit of money for 401k. Not above as I heard I will receive penalty if I save more.
2. Ensure I could get the match by Amazon. Amazon will match 50% up to 4% of salary.
Tool:
1. I could decide how much percentage from salary to be saved into 401k every month.
That would be helpful if anyone experienced could share info about this.
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comments
assuming your base is 200k
In Amazon, max match will be 4K
We can dump 61-(20.5+4) = 36.5K in after tax bucket
I usually frontload the year and go with a higher witholding percentage to hit the cap early. Once cap is hit, paychecks look bigger for the rest of the year.
Roughly it breaks down like this: $58,000 max across all your retirement accounts for tax year 2021.
$58,000 (2021 max allowed across all your retirement accounts)- $19,500 (401k contribution) - $X (your employers 401k match) - $6,000 (IRA) - $X (after tax contribution) = $0 (you max out your yearly limit)
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-401k-and-profit-sharing-plan-contribution-limits
If you have any additional 401ks (I.e. side business and/or other jobs just continue to subtract what you contributed to those in the above equation)
go do fidelity and set contribute % = 20_500/$base
you can also max out the after tax (the one that let you hit IRS limit), same idea