Ask Terry Questions Bonus Payment Deferral

Bonus Payment Deferral

By Terry Savage on February 21, 2021 | Financial Planning / Retirement

I am grateful to receive a corporate bonus this year. I have a 401(k) through my employer. Should I “turn off” my deferrals that would be taken out of my bonus payment? And then re-establish my deferral election after payout?

Terry Says

There are limits on the total amount you can contribute to a 40l(k) each year. And if this bonus would put you over the limit, you should check with your HR department. But, otherwise, sure add more to your 40l9k) contribution. It’s money that will grow tax deferred. And it might even get you more of an employer match.

money

ASK TERRY

a personal
finance question