Last year I was forced to take a withdrawal from my 401K because my company failed the highly compensated employee test. I had put in $18,000 into the 401K and got ~$10,000 back.
After that incident accounting set it up so that my 401K contributions would stop after $8k so that I wouldn't get a forced withdrawal again. But I just now got an email... they failed the highly compensated employee test again and now I'm getting $7,500 back. Which means that the most I can put into my 401K is $500, which is a joke.
If I understand https://www.hrblock.com/get-answers/taxes/personal-information/traditional-and-roth-ira-10769 correctly, I can't put money, tax-deferred, into an IRA, because my company has a 401K. However, if my company didn't offer a 401K I could.
It wasn't a huge issue when I was able to put in $8,000 into my 401K (which is still greater than the $5,500 IRA limit) but $500? I feel like I'm being screwed over. Everyone else gets to put in at least $5,500 towards their retirement, each year, tax deferred, and I can only do $500?
Do I have any recourse?