401k catch up matching

[corn18]

My employer matches 100% up to 4% and then gives another 1% of total pay at the end of the year. So, it's like 100% of 5%. I am eligible for catch up contributions this year and just assumed my plan would lump them in with the regular contributions for matching purposes. Turns out, they treat the catch up as a separate contribution and match 100% up to 4% on that. What that results in is 100% match of the catch up contribution. That's an additional $6k of match I was not expecting this year.

So here's what it looks like:

$18,000 normal contribution
$12,164 match

$6,000 catch up contribution
$6,000 match

$24,000 total contribution
$18,164 total match

That's equivalent to 100% match of 7.76% of income. $6,000 of free money.

Am I missing something? Can someone else verify this is correct?

Tom

[feh]

My employer matches 100% up to 4% and then gives another 1% of total pay at the end of the year. So, it's like 100% of 5%. I am eligible for catch up contributions this year and just assumed my plan would lump them in with the regular contributions for matching purposes. Turns out, they treat the catch up as a separate contribution and match 100% up to 4% on that. What that results in is 100% match of the catch up contribution. That's an additional $6k of match I was not expecting this year.

So here's what it looks like:

$18,000 normal contribution
$12,164 match

$6,000 catch up contribution
$6,000 match

$24,000 total contribution
$18,164 total match

That's equivalent to 100% match of 7.76% of income. $6,000 of free money.

Am I missing something? Can someone else verify this is correct?

Tom

It's up to your HR department how they match contributions. Since the amount they contribute is not counted against the maximums, it's no worry of yours.

Accept the money and run!

[corn18]

It's up to your HR department how they match contributions. Since the amount they contribute is not counted against the maximums, it's no worry of yours.

Accept the money and run!

IThe match doesn't count against the $18,000 + $6,000 maximum but it does count against the $53,000 + $6,000 maximum.

[Like2Plan]

Tom,
That is a real nice match.

[SavingSteve]

Yes that is nice! My employer only matches 3.5% of gross when employee contributes at least 5% for that pay period.

I'd be interested to hear what other peoples employers do.

[LivingAlmostLarge]

DH's company used to match 2% for the first 3% so 6% match immediate vest.