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I know there are a few question about changing employers during a calendar year and trying to maximize company match between the two for 401k plans. I've read through them and I think I understand that, in general, if the plan allows for a corrective distribution, and you get this done before April 15th of the following year for the current year, then no harm no foul.

I am wondering if there are any differences with a Roth 401k situation. Especially since a regular 401k plan considers it an "excess deferral" due to the tax advantage, but in a Roth situation, this is post tax, so I'm unsure how this works.

Scenario:

Employer 1:

  • employed from Jan 1, to Jun 3.
  • Retirement plan: Enrolled in Roth 401k plan
  • Contribution YTD: ~$15,600 (I was aggressive since I was unsure if this contract position would be renewed or converted to a direct hire position at the firm I was working at.)
  • Employer match: No match

Employer 2

  • employed Jun 6 to present
  • Retirement plan: plan to enroll in Roth 401k plan
  • Contribution: To be determined!
  • Employer match: 6%
  • Other: company also allows an extra $10,000 for after tax contributions to plan
  • Pay period: biweekly paycheck

Questions:

  • Should I overcontribute to get the maximum matching?
  • Are there any tax considerations? (I assume no?)
  • Any other considerations?
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  • Are you aware that employer match is always pre-tax (so never Roth)?
    – Aganju
    Jun 15, 2022 at 1:14
  • Are you saying that if i go the Roth way i would miss out on matching? This was something i intended to ask our benefits department…
    – achao
    Jun 15, 2022 at 1:16
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    No; I am saying the employer matching would be non-Roth either way.
    – Aganju
    Jun 15, 2022 at 1:19
  • Sure, but the employer match wouldn't count against the 20,500 limit. But I'm asking about if I get the full match, and my contribution exceeds the limit, then what?
    – achao
    Jun 15, 2022 at 23:02

1 Answer 1

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I was in this situation a number of years ago though my over contribution was accidental.

I asked the first employer to correct the over contribution, but they refused and said I needed to have the second employer do it.

Not a guarantee that you'll have the same outcome but I think it is likely.

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