Question about 401k contributions and limits
Summary of User’s Concern and Solutions Discussed:
- The main problem reported by the user is uncertainty about whether their 401(k) contributions will automatically decrease after reaching the IRS limit, or if they risk going over the limit and incurring a penalty.
- Fidelity representative explained that once the maximum contribution limit is reached, contributions may either stop for the year or switch to after-tax contributions, depending on the plan’s rules.
- Users are advised to review their Summary Plan Description on NetBenefits.com to understand their specific plan rules regarding contributions.
- Step-by-step instructions were provided for accessing the Summary Plan Description and changing contribution amounts through the NetBenefits website.
- Users can also contact the NetBenefits team for further assistance by using the customer service feature on the website.
Here’s the full thread
Hi there, if i contribute 40% each paycheck to my 401k account. will my paycheck automatically decrease the contribution of my 401k (after I reach the IRS limit) or will I go over my contribution limit and get a penalty?
Thanks for reaching out here on Discord, @heavy.arms. Happy to shed some light on this with you.
Once you reach the maximum allowed contribution limit for your 401(k) for a tax year, the plan will either stop contributions for the remainder of that year or your contributions will be changed to after-tax. This can vary depending on your plan’s rules.
You can review your Summary Plan Description on NetBenefits.com to determine your plan’s rule. Or, you can contact your NetBenefits team directly to review the plan with you.
To access the Summary Plan Description, log into the NetBenefits website and follow these simple steps:
1. Select “Quick Links” next to the name of your plan
2. Choose “Plan Information and Documents”
3. Click on the “Summary Plan Description (SPD)” to open the document as a PDF
To change your contribution amount on the website after logging in:
1. Click “Quick Links” next to the plan
2. Select “Contribution Amount”
3. Update the contribution amount(s), then choose “Change Contribution Amount”
You can find contact info for the team who administers your plan by clicking the “Customer service” bubble on Netbenefits.com towards the top of the page next to your profile.
Got it, thanks for your help Emilio!
Of course! Always happy to help. Don’t hesitate to reach out if any other questions come up! 🟢