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In 2014, the IRS maximum 401(k) contribution for an individual is $17,500 but the combined individual/employer maximum is around $52k.

One way to have the combined total higher is to simply increase the match percentage. Generally with a match an employee is well under $52k. It's also normally not possible to have the match increased.

What ways can an employer/employee contribute more to get closer to the $52k maximum in a 401(k)? I know one way is an employer can make safe harbor deposits. Are there others?

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  • Are you self-employed? – JTP - Apologise to Monica♦ Sep 15 '14 at 21:44
  • @JoeTaxpayer I am not, no. There are considerably more options available if someone is self employed... – enderland Sep 15 '14 at 23:23
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    agreed. It seems to me you are somewhat at the mercy of the employer's benefit plan. You are right that it's good to know the less well publicized features. – JTP - Apologise to Monica♦ Sep 16 '14 at 0:21
  • I'm also curious what the reason for the downvote here was? – enderland Sep 16 '14 at 1:17
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    a DVer isn't likely to comment or identify himself. When I'm DVed I try to ignore it, as it's not worth mulling over it. The system isn't perfect. And the really undeserved DVs, like this one, tend to be minimal. – JTP - Apologise to Monica♦ Sep 16 '14 at 11:34
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Your employer might offer a 2:1 match... which would get your close to this limit if you were to aim for the max deferral.

Alternatively, in certain circumstances the employer's match not be capped based on the deferral limit. You can, if you plan allows it, continue to make contributions to the account without tax advantages in order to gain more matching.

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If your 401k allows post-tax Traditional 401k contributions, you could make those, and they would not fall under the $17500 limit. However, post-tax 401k contributions are not that great because the earnings from those are still pre-tax and you will pay tax when you withdraw those earnings.

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I have never seen a company that didn't have a cap on the matching. They may match you 1:1 of 0.5:1 but they generally limit that to to 5, 6 or 8% of your salary.

Many companies are currently lowering the size of the match, or splitting the match so that a lump sum is given only to those who are still employed at the end of the Calendar Year. If you quit you miss out on a portion of the match. Asking them to increase their match would seem to be virtually impossible.

Once you have hit the maximum amount that gets the match, your choices include keep making contributions until you reach the IRS pre-tax/Roth 401K contribution limit. Some plans do allow you to make a post-tax contribution that isn't a Roth. My company no longer allows this, but maybe some do still have it.

You could also, once you reach the maximum match level, contribute to a Roth IRA, assuming that you are eligible.

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  • Once you have hit the maximum amount that gets the match, your choices include keep making contributions until you reach the IRS pre-tax/Roth 401K contribution limit. <-- This is simply not true, you are able to both have safe harbor deposits (if your plan qualifies) as well as in some cases you can contribute after-tax to your 401k. Just because it's super uncommon doesn't mean it's not possible... – enderland Sep 15 '14 at 23:30
  • Assume that my salary is $1m and my company match is 100% up to 5% of my salary. If I contribute 17500, my match is 17500. If I contribute aftertax dollars they will continue to make employer contributions up to the $55k annual max. My current employer matches 20% capped at the annual deferral limit so I was able to contribute 75% of my salary to 401K when I came on board late in the year. – Matthew Sep 15 '14 at 23:59

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