So, I always contribute the maximum to my 401k and I guess at the beginning of 2016 I was overzealous and set a particularly high contribution rate. Where that's left me is I am already at $16,500 of the $18,000 election.

Not the worst problem of the world, but here's my question. My employer matches 50% of employee contributions up to 6% (effectively 3%). My issue is if I reduce to 6% per pay period I will max out in October. Will employers continue to match based on my YTD contributions which are significantly in excess of 6% or am I just going to miss out on hundreds of dollars of match in November/December?

In my head I can't imagine that 401k plans wouldn't typically match based on YTD employee contribution rates, but what do I know.

That is plan specific, it could be either way. Talk to HR/401(k) contact, or if super nerdy read the SPD.

I think it depends on the company. I used to go through great pains to adjust my elections toward the end of the year, especially after selling back unused PTO, to make sure I was putting in exactly what I needed to ensure the maximum company match for every remaining paycheck. Yet at the end of the year, the company "trued up" their contributions for everyone to make sure all got the full match anyway, irrespective if it was on a per paycheck basis. And this was a giant global pharma company, not exactly the most flexible and nimble organization. So, you might want to check with HR. Good luck.

My company waits until the end of the year and matches at that point instead of by paycheck. Hurts on the compounding, but doesn't bother me too much.

By law, they have to pay you the 6% for your entire year salary even if you max it out early. That isn't to say that they make a mistake and you will need to correct them on it. Usually, the TPA will catch it, but I would bring it to their attention mid Dec if it wasn't being done.

reference?

I asked this question and looked up the 401k plan documentation for my company, and they only match per paycheck, so if you max out the account early, you miss out on the match in the remaining months.

I have had to fix this same issue for companies in the past. The Department of Labor rule of match is a percentage of compensation for the year.

Companies can make the mistake, but they will be told by their TPA/401k folks that they need to add more. More than likely, you don't even have to call and point it out, but I would.

When was that law changed? I was told by my big oil company in the late 90's that it was my responsibility to not make the same mistake as OP. IoW, no true up.

It is probably how the actual wording is written in the plan.

Most will say "we match 50% of contributions up to 6% of your compensation." This place should "true up" at the end of the year and probably will with no reminders needed.

Some could say "we match 50% of contributions up to 6% of your compensation per pay period." That language would hose you.

Best solution is to call the place that has your 401k assets (Fidelity, Vanguard, MassMutual, etc). They can read the language and tell you what to do. You could call HR, but they usually don't know.

My experience with calling Fidelity to ask non-standard questions has not been good. My plan offers in-service rollover of after tax contributions to a Roth IRA, and it took me 3 attempts to find someone who could do that for me.

So if you do call, be patient, and read through your plan literature first.

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I have had to fix this same issue for companies in the past. The Department of Labor rule of match is a percentage of compensation for the year.

Companies can make the mistake, but they will be told by their TPA/401k folks that they need to add more. More than likely, you don't even have to call and point it out, but I would.

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That's not true. What is true is what you mention below that it depends on the frequency of match calculation. If it's calculated on an annual basis or some lesser frequency like a per payroll basis.

Your summary plan description will tell you what you need to know.

I'll throw a loop in there, I'm technically a professional employee with a salary but I get paid hourly wage X1 for every hour I work.

My 401k match is paid per pay period (2 weeks) until the end of the year then the company is to go back in and add the difference they owe me based on my overtime.

I normally max out a few months before the year is over.

If your plan allows it, transition to an After-Tax 401K contribution and verify that you still get the match. I get a match if I contribute on an after-tax basis.

An added benefit is that if your 401K plan allows in-service withdrawals you can roll this after-tax 401K money into a Roth IRA and it doesn't affect your limits of a primary Roth IRA.

This is what is called the "Mega backdoor Roth IRA"

Thanks for letting me know I've been doing it wrong for the past couple years. Glad it was only a few hundred dollars I missed out on with the company match as opposed to thousands if I had not realized the error of my ways

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I have had to fix this same issue for companies in the past. The Department of Labor rule of match is a percentage of compensation for the year.

Companies can make the mistake, but they will be told by their TPA/401k folks that they need to add more. More than likely, you don't even have to call and point it out, but I would.

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That's not true. What is true is what you mention below that it depends on the frequency of match calculation. If it's calculated on an annual basis or some lesser frequency like a per payroll basis.

Your summary plan description will tell you what you need to know.

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I should have known better to be very technical instead of giving the 90+% answer that most have. It is rare that a company matches based on compensation per pay period. Almost all do it based on annual.

People misinterpret their matches because they are paid and matched each paycheck. However, that doesn't mean the match is based on the compensation per pay period.

Also, SIMPLE IRAs and SEPs are yearly compensation.

My company does it by monthly pay check. You reach limit early, too bad. No company contribution after that.