How to avoid overcontributing to 403(b)

Submitted by jpa-s t3_zzl5vm in personalfinance

Hi everyone, so good problem to have here. I'm at the point salarywise where contributing 15% of my salary will likely put me over the yearly limit (22,500 for 2023). I say likely because my issue is I don't know exactly how much I'll make next year because I often make a few thousand more then my base salary because of occasional night shift differential and picking up extra shifts. I cannot account for this as it's random and not the same number of shifts or extra cash year to year

So my question is how to I account for this when choosing a % for the 403b? Should I just play it safe and contribute say 12% to make sure I'm under and contribute the difference to a ROTH or something? Keep it at 15% and have to go through HR if it ends up being over the limit? What do people usually do in these situations. Thanks in advance, happy new year !

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BouncyEgg t1_j2c90i9 wrote

If you're at a single employer for the entire year, most payrolls will cut off their employees automatically at the max.

Speak to your HR for confirmation.

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jpa-s OP t1_j2c99un wrote

O that makes too much sense! Thanks I suppose I'll confirm with HR that's the case at my shop

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nkyguy1988 t1_j2c93xh wrote

If your only 403b contributions are through one employer, payroll should automatically stop at the maximum. Just make sure you don't save at a rate too high that you max early and miss out on match if there isn't a true up provision.

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jpa-s OP t1_j2calj6 wrote

Thank you for the reply- I'm not following though how I would miss on the match. They match 1/2 up to 4%, so if I contribute the max won't my employer have contributed an additional 2% of my salary of that number on top of what I contributed?

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sc0pe_v3 t1_j2cbmoz wrote

Yes, but a lot of plans match per payroll. If you max early there will be paychecks where you're contributing $0 so the match is the same and you're leaving money on the table. Aim to get the 2% for every paycheck in the year.

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jpa-s OP t1_j2ch8t2 wrote

Wow that's annoying. Thanks doenthe heads up, seems like the goal should be to shoot as close as possible

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