Is this possible?

Jan 31 12 Comments

So I'm looking to save up for a down payment. I have enough to cover some and instead of contributing 1708 each month to max out on 401k, can I contribute only enough to max out GM match and then contribute more later in the year to reach the max? Is there a limit on contribution from each paycheck?

PS: I know I might miss out on the dip buying into 401k these few months unless the market drops more then I may have lucked out.

TC: 140k

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  • FedEx
    spri02

    Go to company page FedEx

    spri02
    Not sure about that, but you could also look into a 401k loan to cover the down payment and keep your contributions the same throughout the year. If it will be short-term and you think the stock market will be down it could be a viable option.
    Jan 31 0
  • Google
    Frodo‎

    Go to company page Google

    Frodo‎
    Everyone has the same annual max. But the paycheck max is company dependent. For example, at G you can contribute your whole paycheck (until the annual max). At MS, you can contribute 65% (until the annual max).

    Read your 401k plan to know what GM's paycheck max is. It should be in your offer letter or in your company's intranet.
    Jan 31 3
    • Apple
      snfh384xh

      Go to company page Apple

      snfh384xh
      Another thing to be aware of is the match. That’s often done at a paycheck level and not yearly. So if they will only match up to 6%, if you contribute 20% of one pay check, they’re still only matching 6% of that paycheck.
      Jan 31
    • OP
      Yeah the plan is to contribute at least enough to get the full match and then later on put in a lump sum.
      Jan 31
  • There is a yearly limit. You can contribute up to the yearly limit in any fashion. I personally contribute up to my employer match each pay statement, then elect to have my bonus go to my 401k before by bank account so I max it out.
    Jan 31 0
  • Shopify
    Lnmv46

    Go to company page Shopify

    Lnmv46
    if you can affording contributing more later in the year, why not do the same and save that extra for down payment?
    Jan 31 4
    • OP
      The thing is spouse and I put together, we can save a good 2-2.5k more a month if we do just the minimum to get employer match. So 6-7 months into the year and we have 15k available to put extra into the down payment. Once we close the loan, we can bulk into the 401k
      Jan 31
    • OP
      Will most likely need to run the numbers in detail. This was just an early morning thought and I figured I'll ask the collective mind here.
      Jan 31
  • OP
    Bump
    Jan 31 0