Submitted by ThMightyThor t3_11ivu8f in personalfinance
I've started maxing out my 401k and it's looking like I will hit the 22500 limit for this year about 3 months early.
I reached out to my HR and they confirmed that if I hit the limit early they stop matching the 4%
I watched a 401k youtube video and it said that it's a bad thing if I hit my 401k limit early because if my company stops matching then I'm leaving money on the table.
But I don't really get this.
My company is gonna match 4% of whatever my paycheck is.
I'm hourly and my company offers a ton of overtime, so my paychecks vary alot.
Whether I get my normal base pay, and my company matches 4% and I hit my limit in 12 months or I get larger checks for working overtime and my company is still just matching 4% and I reach my limit early. Watchs the difference
I'm thinking it's because more of my money is contributing to the 22500 rather then my companies?
I can't quite visualize that though, I'm confused. Can someone better explain this?
My base pay is 2640 without taxes, biweekly. But on the days that I travel and get overtime my paychecks can be up to 4000 without taxes.