I just want to maximize my employer's contribution. My current employer plan has the following constraints
Company will provide a 100% (dollar-for- dollar) match on the first 5% of eligible W-2
Compensation you contribute on a before-tax 401(k), after-tax Roth 401(k) or after-tax non-Roth basis each pay period, up to the IRS compensation limit. Once your compensation reaches this limit, the company match must end.
Note: The company match is contributed each pay period. In order to receive the maximum company match, you need to contribute a minimum of 5% of compensation on a before-tax 401(k), after-tax Roth 401(k) or after-tax non-Roth basis each pay period.
Suppose I make 100k salary. That means at most the company will contribute 5k
The HR department mentioned it was better to spread my 401k contribution rather than doing a lump sum. I am really confused why that would be the case, when specifically it says 100% match.
Why is it true if I contribute lump sum $5k, it will not be optimized? Am I missing something here?