401k: MAxing out pre-tax contributions and the effect on employeer con

[Guest mowgie]

If I max out my pre-tax contributions to a 401k before year-end, I have to cease pre-tax contributions which also ceases company matching.

Will I be missing out on free company match money if I max out before the end of the year?

For example, If I were to make $105,000/year (it's a hypothetical salary which works out well for calculations). If I contribut 10% I will reach the IRS max of $10,500 on 12/31 and receive company match all year long. But If I contribute 15% I willl max out sometime in the third quarter and only get company match for part of the year.

Am I missing out on free money?

[wmyer]

You may be. It depends on the particular plan document. Some plans give a "true-up" contribution on an annual basis, which means that the match will be based on your total contributions divided by your annual salary. Most large companies that I've seen do not give the "true-up" contribution.