When people here say their 401ks are “maxed”…

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I assume it is the IRS maximum, which is $69K in 2024 for those under the age of 50. Anyone referencing only the employee contribution limit is being intentionally misleading in an attempt to seem like a super saver.

That's a stupid take, and you know it.

No, it is the honest take. I understand that many posters on DCUM are lawyers and, therefore, possess very liberal definitions of truthfulness and integrity. However, most people understand that maxing out a 401k requires maximum employee AND maximum employer contributions. It’s no wonder there are so many tall tales in this forum. People claiming to make 7 figures, for instance, but in only a single year…the majority of which was an inheritance. Normally, they’re pulling an HHI of $400K at best.

Nah, people can't control what their employer puts in.

The hell they can’t. Ours was collectively bargained.

Ha! Ok, didn’t realize the United Steelworkers were a major DCUM constituency.

The statement still stands.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I assume it is the IRS maximum, which is $69K in 2024 for those under the age of 50. Anyone referencing only the employee contribution limit is being intentionally misleading in an attempt to seem like a super saver.

That's a stupid take, and you know it.

No, it is the honest take. I understand that many posters on DCUM are lawyers and, therefore, possess very liberal definitions of truthfulness and integrity. However, most people understand that maxing out a 401k requires maximum employee AND maximum employer contributions. It’s no wonder there are so many tall tales in this forum. People claiming to make 7 figures, for instance, but in only a single year…the majority of which was an inheritance. Normally, they’re pulling an HHI of $400K at best.

Go troll somewhere else.

[Anonymous]

Lol

When I say or read "max out 401k" it means to me contributing the employee max to a 401k or equivalent.

I am 40 years old. I am maxing out my 401k equivalent plan. So, for this year I will contribute $23k to that.

I also have another retirement account through my employer and I contribute 4% of salary and my employer contributes 8%. So that is another $18k combined.

And I max out my Roth IRA so that is $6.5k.

So total is about $48k of my contributions and my employer's contributions.
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[Anonymous]

I agree that when most people say "maxed", they are referring to the IRS max employee limit (currently $23K).

That being said, I do think many plans do allow for additional AFTER-TAX contributions, which would allow for you to get to the IRS max employee + employer limit (currently $69K). For most people though, it's NOT worthwhile to make AFTER-TAX contributions, unless the plan also allows you do either (1) automatically convert the AFTER-TAX contribution to your 401(k) Roth or (2) easily roll over the AFTER-TAX contribution to a Roth IRA.

[Anonymous]

Anonymous wrote:I agree that when most people say "maxed", they are referring to the IRS max employee limit (currently $23K).

That being said, I do think many plans do allow for additional AFTER-TAX contributions, which would allow for you to get to the IRS max employee + employer limit (currently $69K). For most people though, it's NOT worthwhile to make AFTER-TAX contributions, unless the plan also allows you do either (1) automatically convert the AFTER-TAX contribution to your 401(k) Roth or (2) easily roll over the AFTER-TAX contribution to a Roth IRA.

Another thought - after "maxing out" a 401k since I started my first job, some years with good matches, I no longer want to save more than $23k per year. My 401k is already at the point where it grows more than I contribute in most years, and I don't see value in contributing after-tax money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I assume it is the IRS maximum, which is $69K in 2024 for those under the age of 50. Anyone referencing only the employee contribution limit is being intentionally misleading in an attempt to seem like a super saver.

Very few people mean the employee+employer max of 69k when they say max. Nearly everyone means the max allowable individual contribution. But I’m sure you knew that you are just trying to be difficult.

This. The large majority of W2 employees can only contribute the individual maximum amount. Google “401k Max 2024” and get $23k. That is what people mean. Anything other than that is a unique circumstance.

+1

And if you are 50+, you can contribute an extra $7K in "catch up" So it's 23K or 30K. And yes, I'd always assumed "maxing out" means the max you can contribute.

[Anonymous]

Anonymous wrote:I agree that when most people say "maxed", they are referring to the IRS max employee limit (currently $23K).

That being said, I do think many plans do allow for additional AFTER-TAX contributions, which would allow for you to get to the IRS max employee + employer limit (currently $69K). For most people though, it's NOT worthwhile to make AFTER-TAX contributions, unless the plan also allows you do either (1) automatically convert the AFTER-TAX contribution to your 401(k) Roth or (2) easily roll over the AFTER-TAX contribution to a Roth IRA.

Many companies are not permitted to do this because the plans can’t become “top heavy” or else restrictions are placed on contributions beyond the 23k general IRS limit.

[Anonymous]

Anonymous wrote:Lol

When I say or read "max out 401k" it means to me contributing the employee max to a 401k or equivalent.

I am 40 years old. I am maxing out my 401k equivalent plan. So, for this year I will contribute $23k to that.

I also have another retirement account through my employer and I contribute 4% of salary and my employer contributes 8%. So that is another $18k combined.

And I max out my Roth IRA so that is $6.5k.

So total is about $48k of my contributions and my employer's contributions.
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What is your other retirement account? A pension?

[Anonymous]

Anonymous wrote:

Anonymous wrote:Lol

When I say or read "max out 401k" it means to me contributing the employee max to a 401k or equivalent.

I am 40 years old. I am maxing out my 401k equivalent plan. So, for this year I will contribute $23k to that.

I also have another retirement account through my employer and I contribute 4% of salary and my employer contributes 8%. So that is another $18k combined.

And I max out my Roth IRA so that is $6.5k.

So total is about $48k of my contributions and my employer's contributions.
-

What is your other retirement account? A pension?

It's not a pension, it's another type of tax-advantaged retirement account called a 401(a) plan.