January 2015: Maxing out your 401(k) in 2015?

Maxing out your 401(k) in 2015?  

If you plan on putting the maximum contributions into your 401(k) as the IRS allows, there’s a few important things you need to consider for 2015. Check out these details and a tool we have created to help you save the most this year.

You can contribute more in 2015

Federal law limits the amount you may contribute to the Texas Health 401(k) Retirement Plan each year. For 2015, these limits have increased. You can contribute up to a total annual amount (both before-tax and Roth) of $18,000. If you are age 50 or older, you may contribute $24,000.

In 2014, the annual limit was $17,500. For those aged 50 or older, the contribution limit was $23,000.

You only earn a match for pay periods when you contribute

Texas Health can only match your contribution for each pay period that you are making a contribution. If you reach the IRS limit early in the year and must stop making contributions for the remaining pay periods of the year, you are missing out on the matching contributions that Texas Health provides to you for those remaining pay periods.

You can avoid missing out on the match by making sure that you spread out your contributions for all pay periods in 2015. We’ve developed a 401(k) contributions calculator to help you figure out exactly how much you can contribute throughout the year to maximize your contributions and the Texas Health match.

There is an extra pay period in 2015

Normally there are 26 pay periods in a year. Due to how the pay dates falls, there are actually 27 pay periods in 2015. If you are maxing out your contributions, you’ll want to calculate off of 27 rather than 26 pay periods this year.