401k match
Hi Terry, a group of people at my office were discussing the 401k match of 4% that our company offers. One employee was told by HR that once he maxed out his 401k contribution for the year & was no longer having 401k money taken out of his gross wages, that the company no longer had to contribute the 4% match. Is that legal? Thank you.
Terry Says
The maximum an employee can contribute to a 401k plan in 2024 is $23,000.
Most companies match up to a certain limit, such as the first 4% of an employee contribution on perhaps a dollar-for-dollar basis, or 50 cents on the dollar.
A company can’t “match” contributions you don’t make! But many companies will offer a taxable bonus payment in addition to retirement plan matches, if they want to reward outstanding performance.
