That’s funny. When I was at my first full time job in my early 20s the employer I worked for imposed a 14% contribution limit on all employees which meant if you were making below a certain salary, it was impossible to hit the federal contribution limit on 401k.This sounds like what I did. My first job out of school (I was older than 23 at the time, though), I had ten paychecks with which I was eligible to contribute to the 401(k). As soon as I was eligible, I submitted the form to HR to deduct $1700/paycheck (the maximum contribution for the year that year was $17,000) for that. I had several meetings with various higher ups who wanted to make absolutely sure they didn't recommend such a high amount and they wanted to be sure I knew that I would be seeing a significantly lower deposit in my bank account each pay period because of it. Ultimately, they told me it was my money, my choice.Why can't one do both? You can contribute to your 401k right out of school and have plenty of money left over to enjoy life.Just wanted to post with a different perspective. I feel one's 20's are a time to live life to the fullest and not think about being FI 20 years later.
Then, when I set the next calendar year to maximize contributions again, the paychecks felt like a raise because I had so many more pay periods in which to contribute! And, other than a year (that was split across two calendar years), I've contributed the maximum each year. I don't miss the money in my daily life and I know future-me is trying to figure out a way to send a message back to 2012 (or to 2024 for that matter) to thank me for doing this.
I pushed HR on why they had this limit and after making a fuss, they actually changed the policy. This was a small employer. I remember my manager making a snide comment about me being a Wall Street shark, what a moron that guy was.
Statistics: Posted by investingdad — Wed Jul 03, 2024 9:10 am — Replies 65 — Views 10772