I keep seeing all these inflated figures on the 6% WF match on the 401K for over $250K employees . The max an employee can contribute is $19500.00, increases to $26000.00 if over 50. So the 6% match will be between $1170.00 and $1560.00 for those over $250K. How many are there over $250K. That's the question
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Does anyone understand English anymore?
6% match BASED ON contribution is very different than 6% match OF contribution.
OP doesn't know how our 401k works. The 6% savings and match is based on your compensation.
So if you make $100k and put in 6%, that's $6,000. The company will match that $6000. It's not 6% of your contribution, it's 6% of your compensation (salary + bonus).
The difference in the recent announcement is they'll match yearly (at the end of the year) vs. quarterly.
And the other changes which s—s is the profit sharing is no longer given to those over $75k.
"The end of year match vs quarterly is a big difference though, as you lose out on potential gains throughout the year on that money. My spouse and I compared our accounts in the past (one quarterly vs the other at year end match) and it was a difference of abt $20k per year more for the quarterly match."
What a load of c-ap. Maybe if the accounts are worth 7 figures and we had a positive year.
You ever stop to think what would happen if we had a declining year?
"In 2020 you’re limited to $19,500 in annual 401(k) contributions, but any employer matching does not count toward that limit. The employer matching funds do count toward the overall contribution limit of $57,000, but few employers are generous enough with their matching to hit that limit."
Not entirely correct.
Some 401k plans allow for after tax contributions (NO not Roth 401k). These are typically there in medical, law practices and other places where the bulk of the employees are high earners.
While you are limited to 19,500/26,000
Let's say the employer match may only be $15k
totaling 34.5 or 41k
You could still put 22.5k after tax money in the plan.
These plans allow for a mega Roth backdoor. All after tax contributions can be rolled over to a Roth IRA.
The way some people here think how Wells 401K matching works make me think they might not even contribute to 401K.
@2ypc
To be fair, we have no idea whether or not folks work at Wells or not. It's not like a site based on anonymity verifies your work email address or anything.
Dollar for dollar match up to 6% with regulated caps. Jesus OP.
The responses by some individuals in this thread are the reasons why WF is failing. What a bunch of numb heads some of you are.
It is stunning to read Wells employees struggling unsuccessfully to comprehend a basic 401K match.
We work at a bank for heaven’s sake.
I contribute 26K so my total 401K contribution is
26K + 6% of my salary. I make less than 285K but it is still a good amount. My spouse puts away more than I do because he makes more. Great tax shelters and we do not even miss the money.
Wow. It’s sad that employees don’t even know how 401k works. It doesn’t take too much time to read the handbook and understand how it works since your future retirement is dependent on the decisions you make now.
It’s very simple, the company will match 100 percent of the contributions into 401k of your salary up to 6 percent with a cap match of $17,500. So it’s best to contribute 6 percent into 401k if you are make 300k and below.
- If you total gross salary is 100k. And you elected to have 6 percent contribution. You will contribute 6k into your 401k and the company will match 6k. Which comes out to 12k total into 401k for the year
- If you total gross salary is 200k. And you elected to have 6 percent contribution. You will contribute 12k and your company will contribute 12k into 401k. Total contribution will be 24k into 401k for the year
- If your salary gross salary is 300k per year and you are contribution 6 percent. Then your contribution will be 18k into 401k and the company match will be 17.5k since there is a cap of 17.5k match. So the total contribution into 401k will be 35.5k for the year.
Why don't all the people who think it's 6% of your DEFERRALS, just look at their 401(k) accounts? They would see that they are making 6% of COMPENSATION for match (if deferring 6%).
Say you make $50,000.. 6% deferral is $3,000. 6% match is $3,000. 6% of $3,000 deferral would only be $180. Look at your account!!! Are you getting $3,000 match or $180????????????????????? Can't you tell??????
Why not just check your employee handbook. It is 6% of your compensation, not 6% of your contribution... i contribute the max - 19,500. I guarantee you that i got more than 1200 matched this year.
The end of year match vs quarterly is a big difference though, as you lose out on potential gains throughout the year on that money. My spouse and I compared our accounts in the past (one quarterly vs the other at year end match) and it was a difference of abt $20k per year more for the quarterly match.
@1maz OBVIOUSLY, you have to contribute to the plan to get a match. You seem to only understand it one way when the explanation has already been stated. If you contribute 6000 and your comp is 100k, then WF matches 6% or 6000. So at the end of the year there is 12k in your account. If you make 300k your match will be 17k after you've contributed 19500.
It's dollar for dollar match UP TO 6% OF YOUR COMP (limit to 285k in comp). I looked at my safe harbor matches and they are 17k+ per year (I'm over 285k).
@1dwe: Pay attention, because you are seriously misinformed...
- When an employer matches your contributions, they add a certain amount to your 401(k) account based on how much you CONTRIBUTE annually...not on your compensation.
- The most common way employers determine matching contributions is to match a percentage of an employee's CONTRIBUTION up to a certain limit (e.g., 6% at WF).
- Not taking advantage of an employer match is the equivalent of leaving "free money" on the table.
So, the IRS 401(k) annual limit is 100% relevant.
I really hope you're not in Accounting, HR, or any team in which basic math and reading skills are important.
https://www.irs.gov/retirement-plans/401k-plans-deferrals-and-matching-when-compensation-exceeds-the-annual-limit#:~:text=More%20In%20Retirement%20Plans&text=The%20annual%20limits%20are%3A,401(a)(17))
In 2020 you’re limited to $19,500 in annual 401(k) contributions, but any employer matching does not count toward that limit. The employer matching funds do count toward the overall contribution limit of $57,000, but few employers are generous enough with their matching to hit that limit.
You guys are funny... it is 6% of your COMPENSATION, not contribution limit. This is exactly correct:
100k income, 6k contribution = 6k match
200k income, 12k contribution = 12k match
300k income, 18k contribution = (285k * 6%) = 17.1k match
10% of WF employees make $250K or more. That's an exorbitant amount for any company.
OP is correct. There is a maximum allowed by the IRS which varies each year (max increases slightly each year.) You can't contribute more than the IRS max. It doesn't matter how much you make, the max is the max. Period.
$19,500 max plus $6,500 catchup if over 50 years old. That's $26,000 MAX contribution.
For everyone regardless.of salary.
So, if WF matches 6% max annually (no more compounding based on quarterly match, employees!) then the maximum match would be 6% of $26,000.
It's straightforward. No magic.
And, yes, we got screwed by WF making it annual. Compounded interest makes a difference and we're losing that throughout the year.
WF is in trouble and is cutting everything it can to those who have no voices.
2020 elective deferral limit $19,500......therefore, the match is based on elective deferral limit. Get educated people. There’s also a limit on the compensation that is considered for the 401(k).
OMG – scary to see all the clueless calculations. Please get educated on how it works. Just embarrassing.
100k income, 6k contribution = 6k match
200k income, 12k contribution = 12k match
300k income, 18k contribution = (285k * 6%) = 17.1k match. 285k is the limit for matching contributions, hence the availability of deferred comp plans available to HCE.
For reference: https://www.irs.gov/retirement-plans/401k-plans-deferrals-and-matching-when-compensation-exceeds-the-annual-limit
So much incorrect info. It’s 6% of certified como which is broader than just your salary. For example, your bonus is included. Your match during bonus payout check will be higher than the other 3 quarters.
I’m really amazed by how clueless some WFC employees are about basic elements of business
@OP, Looking at your own 401k statement and the contributions that WFC makes should show you that your info is wrong.
Login to the Retirement site:
My Account > Account History > Transaction History. Then filter on Contribution Type: Safe Harbor Matching Account and and Transaction Type: Contributions. Set a date range for this year.
It's 6% of your salary, not your contributions, although you need to contribute at least 6% to get the full match. So if you make 100k and contribute 19.5k, you'll get a match of 6k.
no, you are not stating correctly how it works.
it is a dollar for dollar match up to 6% of cash compensation, and subject to the annual limit
If you max out your 401K contribution, the match is quite significant.