CrimsonRaider2357 t1_jeaemnt wrote on March 30, 2023 at 4:11 PM

How much can you afford to contribute?

Assuming your goal is to max it out, that would be $22500. Assuming you have 20 paychecks left, it will probably take a full paycheck cycle for the contribution to update, so I will assume you are splitting that among 19 paychecks, for a contribution of $22500/19=$1184 per paycheck remaining. Each paycheck has a gross salary of $175k/27=$6481, so you would contribute $1184/6481=18.2%. Note this does not include your bonus.

beatplusmelody OP t1_jeaiq5b wrote on March 30, 2023 at 4:37 PM

Thank you so much, I do plan to max it out. This is my first time having a bonus, its a target of 30% but subject to end of year reviews so should I calculate the bonus into my total salary when setting the 401K percentage? Or do you think you would just calculate it on the base salary?

CrimsonRaider2357 t1_jear6md wrote on March 30, 2023 at 5:31 PM

I would just calculate based on your base salary. If you get the bonus, you can recalculate and adjust the percentage down afterward. Most bonuses are paid at the beginning of the following year anyway, which means your 2023 bonus will probably be paid in 2024 and count towards the 2024 limit, not 2023.

beatplusmelody OP t1_jeavnub wrote on March 30, 2023 at 5:59 PM

Awesome thank you for your advice! :)

CrimsonRaider2357 t1_jebmvo4 wrote on March 30, 2023 at 8:52 PM

Glad to help! Keep in mind that if you contributed to a 401(k) at a different employer in 2023, you will need to subtract those contributions from your 2023 limit to avoid overcontributing.