Assuming you max out your 401k, do you adjust your bonus payouts to contribute the max early in the year? I can make a few cases either way.

It depends on your company's matching structure. A single large deposit might not get the same amount of matching dollars that a comparable amount would if you spread the deposits over time

I do not put any bonus into 401k. Strictly payroll deduction.

I do the minimum contribution to get the full match in all other pay periods, then calculate a larger contribution for the yearly max out for the one paycheck where bonus is paid out.

Assuming your match is trued up and you get the full amount due to you, it's best in theory to max out as early as possible. So if your bonus is toward the beginning of the year and it is enough to max out your 401k/put a big dent in the max, it's a decent idea to do it.

Dollar cost averaging your contributions throughout the year makes sense to a lot of people - and may be needed to ensure appropriate cash flow from your paycheck - but if the market returns a +% gradually throughout the year, your spread out contributions aren't getting the full effect.

Ag13 said:

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Assuming your match is trued up and you get the full amount due to you, it's best in theory to max out as early as possible. So if your bonus is toward the beginning of the year and it is enough to max out your 401k/put a big dent in the max, it's a decent idea to do it.

Dollar cost averaging your contributions throughout the year makes sense to a lot of people - and may be needed to ensure appropriate cash flow from your paycheck - but if the market returns a +% gradually throughout the year, your spread out contributions aren't getting the full effect.

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That true-up is the key and is based on how the match in your 401k plan is designed. Match can be based on actual employee contribution per pay period or the "elected" contribution (i.e. the percentage you selected). The later will true up your match at year-end even if you max out very early in the year as long as your election is still set as if you want to contribute throughout the year/ The former will leave money on the table match-wise if you don't have actual $$ contributions taken out of every check paid during the year.

My company match is done regardless of contribution pattern so I have a contribution rate of 10% for paychecks and 50% of bonuses. My goal is to max the 401k contribution as fast as reasonably possible and then fund other investments or spend it once the max is reached.

My opinion is that more time in the market is better and once it's there, I can't spend it.

I gave the same setup. I also maximize contributions early, and the only thing that would screw me is if I changed jobs and couldn't get the new employees match because I couldn't contribute due to being maxed out.

Thanks for all the additional ideas. I get my match when I make the contribution.

The potential for missing out on a better match if I changed jobs is something I hadn't thought about. The only job change scenario I thought about was if I went some place where they had a long period before I could participate in the 401k thereby missing potential tax free investing if I hadn't already maxed out.