401k question if quitting work

[Anonymous]

Say someone is planning to quit their job (and not seek further employment) in February, can they contribute the whole 18k max in January. Or is it prorated by months employed?

[Anonymous]

Anonymous wrote:Say someone is planning to quit their job (and not seek further employment) in February, can they contribute the whole 18k max in January. Or is it prorated by months employed?

Sure, if your paycheck is more than 18K in January to cover taxes,etc. I don't see why not.

[Anonymous]

Anonymous wrote:Say someone is planning to quit their job (and not seek further employment) in February, can they contribute the whole 18k max in January. Or is it prorated by months employed?

Yes, you absolutly can. However, it can reduce your company match, due to thr way itnis calculated. I did this at the beginning of 2016 because the market was looking so good. At the time, i didnt realize this "cheated" me out of 5k of my normal 12k of company match.

[Anonymous]

It's not pro-rated but you can't contribute more than your total compensation in a year so you would have to earn $18k before you quit.

[Anonymous]

thanks. so someone could do 100% contribution and quit when it got to 18k. got it.

[Anonymous]

Some companies have a max percentage

[Anonymous]

Anonymous wrote:Say someone is planning to quit their job (and not seek further employment) in February, can they contribute the whole 18k max in January. Or is it prorated by months employed?

Depends on your salary It was my strategy for years and it finally paid off when I got laid off in February. I was contributing the max allowable (something like 80%).

[Anonymous]

Anonymous wrote:Say someone is planning to quit their job (and not seek further employment) in February, can they contribute the whole 18k max in January. Or is it prorated by months employed?

Sure.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Say someone is planning to quit their job (and not seek further employment) in February, can they contribute the whole 18k max in January. Or is it prorated by months employed?

Depends on your salary It was my strategy for years and it finally paid off when I got laid off in February. I was contributing the max allowable (something like 80%).

+1 Some people do this every year anyway (capitalizing on the time value of money), check the max allowable at your workplace

[Anonymous]

Our company caps contribution at 70% of income and 25% for highly compensated employees (I think above 120K but not sure). So what you can contribute in January depends on your company rules.