Joining meta Want to max out employer contributions So can I over contribute in a year ? #investment #401k #fidelity #meta #faang #facebook #tech
@passho super helpful
Google, Meta matches 100% of half the limit, so you would NOT want to contribute the whole 20.5k there, since only half is matched. If you work both at Google and at Meta in the same year, you can get a total match of 0.75x the 20.5k, if you simply split your own 20.5k between the two, evenly. Also, it's best to ask for a refund at the new employer (not the old one), and they have to oblige. People have reported that you still get to keep the match.
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You would have to make a withdrawal of excess contributions from your previous employer's plan. So suppose you contributed $10k this year to your Amazon 401k, and you want to contribute $20.5k to your Meta 401k. You would ask the Amazon 401k plan administrator to make a withdrawal of that 10k plus any gains (including forfeiting any Amazon match on the 10k), which would allow you to contribute the full 20.5k to the Meta plan without the over-contribution penalty. But the Amazon plan administrator has no real obligation to work with you once you leave, so they might just decline to let you withdraw your "excess" contributions. In that case, you're stuck with contributing 20.5k to the Meta plan minus whatever you contributed to the Amazon plan. You should sort this out as soon as possible, since excess contributions must be returned to you by April 15th of the following year. If you don't correct your over-contribution by then, you pay a 10% penalty on the excess amount every year until it's withdrawn (and forfeit gains and employer matching on that amount).
This is really helpful, I'd wondered about this myself. Question though: Is this ever actually worth the trouble? Genuinely asking under what circumstance you should do this.
+1 good advice. By the way, Fidelity is Amazon’s 401k provider and they are not helpful with removing excessive contributions because it requires additional paperwork/amended W2 from Amazon/headache according to a few ex-Amazonian experiences here. I don’t recommend over contributing and dealing with this.