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I have two jobs, both offer 401k matching up to 6%. Is there any advantage of splitting my 401 K contributions ( $9,250.00 each) between employers to take advantage of the 6% matching or it doesn't matter?

6% of each employer is $5000. I get paid equally on both employer so if I contribute $9,250 on each 401K, I do not go over the limit of $19,000/year. My question is; is there any benefit (matching wise) if I split my 401k between the two employers or do I get the same amount of matching if I just put all $19,000 on one employer?

  • Am I correct in interpreting this to mean that if you took the full 6% from both it would put you over the contribution limit? – Rupert Morrish Jan 18 at 0:30
  • Are you contributing over 6% with one and none with the other? – Hart CO Jan 18 at 1:02
  • No, it doesn't make me go over the limit. I get paid equally by both employers. I want to know if I will actually fair better ( matching wise) if I split my contributions between my employers – henry Jan 18 at 1:34
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    It should be obvious that getting $5000 from each employer is better than getting $5000 from only one employer. It is so obvious, that I feel I must be missing something in the question. – prl Jan 18 at 4:44
  • I does sound like I wound get 6% matching from each employer , but that is my question, do I really. I am trying to see if the logic is correct. – henry Jan 18 at 5:02
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To answer the question, no, if you contribute $19,000 in plan A and $0 in plan B, you will get $5,000 in matching from employer A and $0 in matching from employer B.

If, however, you contribute $14,000 in plan A and $5,000 in plan B, you will get $5,000 in matching from employer A and $5,000 matching from employer B.

In both of these scenarios you've contributed $19,000, but in the first you have $24,000 in your 410(k)s and in the second you have $29,000.

The best option, though, may be to contribute $5,000 in each to get the maximum free money, and then save an additional $9,000 elsewhere where you get more choice and lower fees.

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    The employer match does not count towards the 19000 electric deferral limit. So the op can contribute up to 9500 to each or another mix depending on which plan has better things investment options. But the match is free money, an instant 100% return on your contribution, so you should always take advantage of the maximum match as long as you are able. In this case op should contribute at least $5000 to each plan. – T. M. Jan 18 at 1:58
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    I down voted because I didn't feel there was enough explanation on why $9,000 should be invested elsewhere instead of maxing out the 401k contributions. The OP made no mention of what investment options or fees there are on their employers 401k provider. It's possible the OP has very good options at very low rates, or it is also possible that your assumption is correct. Don't forget that $9,000 would be tax free if contributed to a 401k but not tax free instead of invested elsewhere. – airfishey Jan 18 at 16:46
  • @airfishey: more choice and lower fees. The topic has a lot of discussion here and elsewhere, that I didn't think needed to be repeated here. – Rupert Morrish Jan 19 at 22:23
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You definitely need to contribute at least 6% to both 401k plans to maximize your total match. You also want to make sure that you don't hit the annual limit (currently $19K as of 2019) until the last pay period of the year. If you contribute too much combined such that you reach the limit in, say, October, you will no longer be able to contribute for the remaining months of the year and thus will lose out on the match too. Since it sounds like you want to max out, I recommend contributing 6% to each plan at a minimum, and then choose whichever 401k plan has the lower fees as the one you contribute the rest to get you up to $19K for the year.

If you have more money to contribute for retirement after maxing your 401k, look into HSAs and IRAs.

Note: the $19K annual limit only applies to your contributions, not the match. The total limit for your contributions combined with the employer contributions is currently $56K (as of 2019).

Tip: if a bonus is paid out and your employer(s) also match 401k contributions on the bonus, you may need to tinker with your allocations to make sure you stay under the $19K limit while still contributing at least 6% of your pay in every pay period of the year. Unfortunately some companies pay out a bonus in the last pay period of the year which makes it difficult unless you know what your bonus will be. If they pay it in January it's much easier to calculate.

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